Small Claims Question

[forgivr]

What is the name of your state? PA

I, my company, which is a S-corporation, and my wife were sued in small claims court, by a former shareholder. I and my wife won the case, but my company lost. my company has no assets as it is a consulting firm, and I am the only employee. The judge accepted an e-mail which was the only evidence presented in the case stating money was owed. Since the company has no assets, and has no money to pay judgement what can happen? I was planning on shutting the business down anyway, it was a side experiment that never worked out. Do I have to bankrupt the company, or can I simply file for dissolution of the corporation.

 

[JETX]

The answer to your question is complex. For example, I have found that a huge majority (90% plus) of 'closely held' corporations are in violation of the state corporation laws. And that violation could make YOU personally liable for the corporate debt. For example, have you maintained strict records of the corporate meetings?? Do you have strict records of any action made by the board or officers, for example, authorizing signatures on checking accounts?? Very likely, the answer is no. So, if this judgment creditor is smart and aggressive, you could very easily become liable for the debt. Especially, if the corporation is not closed down properly.

So, my suggestion, why not just have the corporation own up to the debt/damages that it caused someone else and avoid the risk of personal liability??
In any case, I would STRONGLY suggest you contact an experienced attorney who can help the corporation recognize its responsibilities.