Legal Question in Landlord & Tenant Law in California


We are a small company in California. We failed 60 days advance notice in terminating office lease and the lessor told us that we have a liability to pay another 12 months even after we vacate it at the end of the current lease. However, our company will be completely closed down, I mean "dissolved" with submitting "certificate of dissolution" to the State. Accordingly our HQ who is located outside of United States told me to go back to the country; at the same time, with dissolution, I will lose the legal status in staying in the U.S. And the bank will be closed for this process. Probably, dissolution process will be completed within 2 months. So I wonder if our California corporation will still have a liability to pay the rent due to automatic renewal after dissolution? If we will, can we settle it down with paying the rent for 60 days (2 months) which is a period required for advance notice. I think it impossible to keep paying after dissolution because the bank is closed and money is all gone.

Any advice would be appreciated.

Asked on 5/24/13, 9:03 am

1 Answer from Attorneys

Phillip D. Wheeler, Esq. Phillip D. Wheeler, Attorney At Law

Officially dissolving your business puts creditors on notice that your business can no longer incur business debts. In fact, in some states, if you don't notify your creditors and customers by officially dissolving your business, they can sue you for a longer period of time. That is your scenario.

1. Vote to Dissolve

2. File the Proper Dissolution Forms

3. Cancel Out of State Registrations or Qualifications

4. Get a Tax Clearance If Necessary

There are many other practical steps, and they can affect your personal liability if not done properly: notifying your creditors, selling off inventory and equipment, liquidating the rest of your assets, and negotiating the settlement of your debts.

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Answered on 5/25/13, 7:43 am

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