Legal Question in Business Law in California

Re: Judgement-length of enforement

The statute of limitations for breach of a written contract is four years. You should file for a conditional dissolution of the corporation now. You can phone me at 949-278-5220 to discuss. Regards,

Ben

Re: Judgement-length of enforement

The statute of limitations for most types of written contract in California is four years from the date of breach. Probably each failure to make a monthly payment would be regarded as a separate breach, so if it were a long-term contract the corporation probably isn't beyond jeopardy of suit for the more recent payments.

Judgments are generally good for ten years and can be renewed.

There is also a body of law that says the shareholder(s) or director(s) of a dissolving or defunct corporation, or whoever has control over its remaining assets, are involuntary trustees charged by law with administering the remaining assets for the benefit of creditors. If the corporation has made ANY distribution of money or other assets to insiders, such as a payment of salary to an owner-officer or a return of capital, when there are unpaid bills, this is a violation of the implied trust and can be voided and the debt imposed upon the trustee-recipient of the improper distribution.

If the amount is small the probability of a serious collection effort is not great, but the potential liability is, in theory at least, difficult to escape.