Are You an Officer or Director of a Dissolved Corporation?

While you may think a dissolved California corporation no longer has officers and directors, that is incorrect. The California Corporations Code assumes that officers and directors exist for dissolved corporations. In fact, Corporations Code Section 2011(b) provides that summons and other process against a dissolved corporation “may be served by delivering a copy thereof to an officer, director or person having charge of its assets or, if no such person can be found, to any agent upon whom process might be served at the time of dissolution”.

In a least one Federal case interpreting California law it has been held that, under the statutory scheme that replaced the common law rule in California, “a corporation’s dissolution is best understood not as its death, but merely as its retirement from active business.” Thus, the Court held dissolved California corporations continue to exist as legal entities.

The continued legal existence of a dissolved California corporation raises the issue of who are the officers and directors. First, look at the Certificate of Dissolution. Section 1905(a) of the Corporations Code requires in the case of a non-judicial dissolution the certificate be signed by a majority of the directors then in office. This raises another issue that is unsettled in California, “Are the directors identified in the Certificate of Dissolution essentially directors for the rest of their lives?”

Since the Certificate of Dissolution is signed by a majority of the directors then in office, it also begs the question, can an officer or director resign after dissolution of the corporation? So far, there does not appear to be a definitive answer to this question. If you are an officer or director of a California corporation that is considering dissolution, we suggest that you consult your legal counsel to determine what you can do to insulate yourself from potential director liability after the dissolution is final.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.