Pikeville, TN asked in Contracts and Business Law for Tennessee

Q: what are the laws regarding dissolved LLC's who enter into contracts representing themselves as registered and active

I entered into a general contractor agreement with a company who represented themselves as a registered LLC I performed the work they contracted me to do but they never paid for my services and then I come to find out they were administratively dissolved when they entered into the agreement with me.

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2 Lawyer Answers
Mr. James Charles Wright
Mr. James Charles Wright
Answered
  • Knoxville, TN
  • Licensed in Tennessee

A: If an entity is administratively dissolved, it can pay the appropriate fees and be reinstated. This shouldn't impact a claim against the entity. A person may also have a direct right of action against the person that signed the agreement.

1 user found this answer helpful

Kas DeCarvalho
Kas DeCarvalho
Answered

A: Under most States' laws (and it's important to check on a case-by-case basis, because each State in the U.S. has a separate and distinct set of laws relating to Limited Liability Companies, though most overlap quite a bit), once an LLC is dissolved (administratively or otherwise), there is usually a certain post-dissolution period during which: a) The LLC is permitted to operate (though the permitted acts are often limited to "winding up" activities); and b) the LLC may still be sued and held legally liable for the Company's acts. However, in any case where the LLC isn't in good standing, but is nevertheless being held out by its Members or Managers as a going entity, the essential result is that the person(s) signing the contract and/or the Members can be held personally liable for the acts of the (defunct) Company. Finding out who the Member/Owners are might be a challenge--many States don't require Member information to be publicized--but if you can find them, you can sue them...or as a most practical matter, sue both the Company *and* it's principals.

1 user found this answer helpful

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