Can you sue a company that no longer exists?
Asked by: Prof. Dereck Krajcik V | Last update: June 18, 2025Score: 4.5/5 (63 votes)
Unless a company has been properly dissolved and its affairs have been properly wound up, that enterprise still exists as an entity. Absent a proper, orderly dissolution, you can take legal action against the company for things like unpaid debts, a breach of fiduciary duty, fraudulent conveyances, and other issues.
Can you sue a company after they close?
Published on July 10, 2024. Filing a lawsuit against a business that no longer exists can seem daunting. You can indeed sue a dissolved company, especially if it failed to wind up its business and dissolve properly.
Can you sue a company that does not exist?
In California, for example, you may be able to sue a dissolved company if the company has undistributed assets, if the company's assets have been distributed to shareholders, or if the company is a defendant in a quiet title action.
How to sue a defunct company?
File a Claim and Serve the Defendant
Even if the business is defunct, you may serve the papers upon the last known registered agent — or the Secretary of State. If you are suing individual owners or shareholders, they must be personally served.
Can a dissolved company be held liable?
The corporation may remain liable to the extent of its undistributed assets or available insurance. The power of a dissolved company to defend and prosecute claims continues as necessary to wind up its affairs.
HOW TO SUE A COMPANY OR AN INDIVIDUAL? Watch this before you file a lawsuit.⚖️
Can you sue an inactive LLC?
Unless a company has been properly dissolved and its affairs have been properly wound up, that enterprise still exists as an entity. Absent a proper, orderly dissolution, you can take legal action against the company for things like unpaid debts, a breach of fiduciary duty, fraudulent conveyances, and other issues.
Does a dissolved company have standing to sue?
A dissolved corporation does not lose its character as a corporate body after dissolution. Indeed, every state extends the life of a corporation after dissolution for a definite time so that the corporation can prosecute and defend lawsuits and otherwise settle its affairs.
Can you sue a company years later?
Breach of a written contract: 4 years from the date the contract was broken. Breach of an oral contract: 2 years from the date the contract was broken.
Who owns the assets of a dissolved corporation?
When a company is dissolved, its assets are liquidated to pay off debts and obligations. The remaining assets may be distributed to shareholders or sold to third parties. The dissolution process involves closing operations, notifying creditors, suppliers, and clients, and settling all outstanding taxes.
Can you personally sue a company?
Depending on the state, a company may be required by law to have legal representation. Individuals, by contrast, can sue without the help of a lawyer. However, speaking with a business lawyer about your case is always a good idea. The law is complex, and filing a lawsuit can be complicated and time-consuming.
How to file a lawsuit against a company?
To sue a company, you must file legal paperwork in the appropriate jurisdiction, which could be the court in the county where you reside or the county where the company does business. In addition, filing a complaint requires that you also pay a fee to purchase an index number for the case.
What happens if you sue an LLC with no money?
Suing an LLC with no assets is possible, but often unproductive financially. LLCs shield owners' personal assets, so winning may not yield payment. If you're wondering whether having no assets protects you from lawsuits against your LLC, it's important to understand the limitations.
Can you sue a company that was acquired?
In either event, successor liability typically attaches to the entity that results from a merger or acquisition so suing the successor company remains a possibility.
Can a company just shut down without notice?
Worker Adjustment and Retraining Notification Act (WARN) (29 USC 2100 et. seq.) - Protects workers, their families and communities by requiring most employers with 100 or more employees to provide notification 60 calendar days in advance of plant closings and mass layoffs.
Can you collect money from a closed business?
Legally speaking, the answer is yes, but it might be tough. Some people will definitely lose out because that money might no longer be there. As the saying goes, “you can't squeeze blood out of a turnip.”
How long does it take to sue a company?
It doesn't take much time to file a lawsuit. In many cases, the parties are able to negotiate a settlement in the weeks and months after the lawsuit is filed. However, if your case moves towards trial, it could take a year or longer to go to court or otherwise resolve the case.
What happens when a company is defunct?
Defunct, in a business context, refers to the condition of a company, whether publicly traded or private, that has gone bankrupt and has ceased to exist. Defunct usually refers to something that no longer exists, functions, or is in use.
Who is technically the owner of a corporation?
In California, a Corporation is owned by its shareholders, who are the individuals and entities) that own shares of stock in the California Corporation.
Can you sue a close corporation?
Lawsuits may be filed and served against a dissolved corporation whether the cause of action arose before or after dissolution. California Code of Civil Procedure section 416.20; Corporations Code section 2011(a)(1).
Can I sue for something 20 years ago?
There are no general rules related to the time period to file a case. However, you almost always have at least a year to file a civil lawsuit. Depending on the type of case or civil action, it could be much longer. Different statutes of limitations apply to different types of cases and causes of action.
How long do you have to file a federal lawsuit?
Within 90 days from the day you receive the agency's decision on your complaint, so long as no appeal has been filed.
Can I sue a company for wasting my time?
Though countersuits for wasting time can be challenging, there have been cases in Houston, Texas where individuals have successfully pursued such claims. These examples serve as precedents and demonstrate that it is possible to seek compensation for time wasted through a countersuit.
Can you sue a company with no assets?
Suing a company with no assets or one that is out of business does not result in debt repayment. The owners of such companies may have personal assets sufficient to repay the debt.
What happens to the liabilities of a dissolved company?
Clearing the slate
First, dissolution doesn't mean a free pass for a company's liabilities. When a company dissolves, it must settle all its outstanding debts, claims and obligations. The company must ensure that every creditor, supplier and lender is duly paid off.
How do you prove a business is dissolved?
Certificates of Status (Online) - certificates of status are available within minutes online at bizfileOnline.sos.ca.gov. Certificate of Status certifies to the current status of an entity (e.g., active/good standing, suspended, dissolved, cancelled, etc.)