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  1. #1
    Join Date
    Aug 2012

    Default Can Someone Sue My Dissolved LLC

    My question involves business law in the state of: Colorado. Denver County.

    I have looked this up all over the web and am getting conflicting information. My boyfriend said that you can absolutely not sue a dissolved LLC. Someone can attempt, but without any assets, it will get thrown out. And they can not go after you personally. He has dealt with that on numerous occasions in his own business ventures. On both sides.

    Here's my story.
    I had a semi-successful small business providing services. I had my LLC under my business name and everything was in order. In June, I became very ill and had to be unexpectedly hospitalized. I was unable to finish out my services and owe about $600 to a customer who is trying to serve me with papers. (I'm assuming. A man with paperwork came to my door a few days ago and I was too terrified to answer. I don't owe any other creditors or debtors. This is the only thing I know of). I dissolved my LLC shortly after my hospital stay. Not because I want to get out of paying. But because I am done being a business owner. If I had the money, I would pay her. I am completely unemployed and am still unable to return to work due to the medical stuff. I'm a big believer in karma and want to make things right with her, but I simply can't right now.

    I make each customer sign a long liability release form. In that form it goes over "in case of emergency" protocol which I specifically state that basically I am not liable for anything. I know there is grey area in everything and I AM 100% responsible for paying her back. I am just unsure how to go about this. I wasn't planning on having an emergency. I also wasn't planning on losing my income and closing my business. I do not have the emotional strength to go to court and handle this right now.

    So in short:
    Customer signed a liability release which pretty much voids me of any financial responsibility unless it's due to willful negligence.
    The amount she paid was for a full 2 weeks of services. $600. I preformed a weeks worth, so technically it's half of that that I owe.
    I dissolved my LLC before I had any idea this was going to turn into a legal issue.
    I have NO business assets. No bank account. I never really had any assets to begin with.

    Any insight would be appreciated! And yes, I know I need to live up to my end and simply pay her. I planned on it, I just don't even have an extra $20 right now.

  2. #2
    Join Date
    Mar 2008

    Default Re: Can Someone Sue My Dissolved LLC

    Did you FORMALLY dissolve the LLC. Here's an article on the steps:

    Note "step 3" about notifying creditors. When I was going to dissolve my LLC in NY, my attorney warned me not to do it so that quickly because NY state law makes me personally responsible if the LLC is dissolved, and there are outstanding debts or CLAIMS. So YES, in NY creditors cannot sue a dissolved LLC, but they can certainly sue the managing members personally if the LLC is dissolved with outstanding debts.

    But I was told if the LLC is not dissolved, then I can legally tell creditors to sue the LLC that has no assets, and NOT ME. In your case, if you dissolved the LLC with outstanding debts, regardless of state law, and if I was the creditor, I would still sue you personally for fraudulently dissolving the LLC without following proper procedures, i.e. NOT notifying creditors.

    Also note that a SMLLC affords little liability protection particulary if you are also the one doing the work. That is the reason why I did not place my rental properties into LLC's, I buy a lot of insurance instead because if something went wrong, I'd be sued personally for negligience anyway in addition to the LLC.

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