Legal Question in Business Law in California

If an LLC owns a subsidiary LLC, and the parent LLC is disolved or folded for any reason - what happens to the subsidiary LLC? Does it cease to exist, or does it remain so long as its status with the state remains "active"?


Asked on 8/10/14, 12:11 am

2 Answers from Attorneys

Charles Perry Law Offices of Charles R. Perry

The subsidiary's status does not change if the parent LLC dissolves or disappears for any reason. The ownership of the subsidiary LLC would essentially pass as an asset to the owners of the parent, as though ownership were direct..

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Answered on 8/10/14, 1:59 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

The existence of the subsidiary LLC is not dependent upon the continued existence of its parent/owner, much as when a human owner of corporate stock passes away. The assets of a dissolved LLC, whether they be cash, office furnishings, patents, or ownership of another LLC, continue to exist. The only question is who is now the owner? It could be the now-former owner(s) of the dissolved parent LLC -- or it could be the creditors of the dissolved LLC, if their claims were not otherwise addressed. No LLC or corporation can lawfully be dissolved and its assets transferred to its owners unless and until creditor claims are satisfied.

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Answered on 8/10/14, 9:57 am


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