Q: Any law in Colorado to stop an LLC from dissolving to avoid paying a judgement then turn around and start a new like LLC
We are suing a Contractor (LLC) and are pretty sure we'll win, but hate to think they can simple dissolve the LLC, and then turn right around and start another Contracting Company (LLC) and get away with it.
A: In that scenarios there's a few different approaches to pursue the owners and the new entity. First LLC owners can be responsible for judgements against the LLC for amounts distributed form the LLC for a period of three years prior to dissolution. Second, this would likely be considered a fraudulent transfer. Both create liability for the owner/s individually, which is counter to the purpose of having an LLC in the first place. It's always a bad idea, but people do it.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.