Am I Still Liable for Business Debts After I Retire and Cancel My License?
Full Question:
Answer:
The answer will depend in part on whether you dissolved the corporation or not. Dissolution is the termination of a corporation, either voluntarily by resolution, paying debts, distributing assets and filing dissolution documents with the Secretary of State; or by state suspension for not paying corporate taxes or some other action of the government. The primary steps involved when dissolving a company include corporate action to approve the dissolution; filing articles of dissolution with the state; filing all necessary federal, state, and local tax forms; statutory notification to creditors; settling creditors' claims and distribution of remaining business assets.
When a voluntary proceeding for winding up has commenced, the corporation shall cease to carry on business except to the extent necessary for the beneficial winding up thereof and except during such period as the board may deem necessary to preserve the corporation's goodwill or going-concern value pending a sale of its business or assets, or both, in whole or in part. The board shall cause written notice of the commencement of the proceeding for voluntary winding up to be given by mail to all shareholders (except no notice need be given to the shareholders who voted in favor of winding up and dissolving the corporation) and to all known creditors and claimants whose addresses appear on the records of the corporation. The corporation has a duty to pay claims of creditors of the corporation out of assets of the corporation in the winding up process.
Whether your bond covers the matter will likely be governed by contract principles, according to the terms of the contract involved. We suggest you read the terms carefully regarding coverage.
If your license is retired, it is likely the recovery fund won’t apply, as one of the requirements to recover is that the license is inactive as a result of the homeowner’s complaint.
Please see:
http://www.azroc.gov/Recovery/answers.html
