If I close my S Corporation, can someone come back and sue me personally after the corporation has closed?

Asked almost 4 years ago - San Antonio, TX

My corporation is in good standing now with the state and has no lawsuits pending. However, I am going to close it soon so I can take advantage of another business opportunity. Could someone that I have done work for under the corporation come back and sue me personally?

Attorney answers (2)

  1. Steven J. Fromm

    Contributor Level 20

    Answered . I agree with the prior attorney. Basically, if you have attended to corporate formalities such as regular board of director meetings and minutes drafted, filing all corporate tax returns, etc. then there is little way that you can be sued successfully for corporate debt. This assumes that you did not hold yourself out personally as doing the work and all correspondence was done in the name of the corporation.

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  2. Michael S. Haber

    Pro

    Contributor Level 20

    Answered . What you are really asking about is whether it is possible for a plaintiff to "pierce the corporate veil" -- that is, convince a court that because your corporation engaged in certain practices that blur the lines of distinction between you in your personal capacity and the corporation as an entity, that it would be fair to subject you to personal liability. Piercing the corporate veil is possible when a close corporation is not careful in conducting business in its corporate capacity.

    A corporation, as you already know, is a separate legal entity. One of the major purposes of incorporation is to limit liability, because ordinarily only the corporation's assets are at stake, regardless of the individual wealth of the shareholders.

    I cannot actually answer your question without having a very good idea of everything in which your corporation has been involved.

    But the fact that your corporation will soon no longer exist as an entity does not make it more plausible (or easier) for a person who wishes to sue to actually pierce the corporate veil.

    Please note that I am a New York attorney and cannot advise you as to the application of your state's laws. For that reason, you may wish to consult with a local attorney.

    Good luck to you.

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