Legal Question in Business Law in California

Corporate Officer

Additionally, this business was a CA Corporation of which I was a corporate officer during my tenure.

I was the Adminstrator for a fraternal organization from 1993 to 1997. The local chapter folded last year, the parent organization is still going strong. Evidentley the local chapter failed to paid a vendor for a outstanding invoice from last year and I was served with an order to appear in court. The vendor states that I am still listed as the''Guarantor'' on the account. Will this stand up in court after ther vendor has done business with several other Administrators when I left? I moved out of the area and dropped my membership all together after I left. How can I be held responsible for a bill that I never authorized after eight years? Thank you


Asked on 1/15/06, 12:54 pm

1 Answer from Attorneys
Gregory Cartwright The Cartwright Law Group, APLC

Re: Corporate Officer

Generally speaking, an officer, director or shareholder of a corporation is not repsonsible for the debts of the corporation. There are three main exceptions to this rule. The first is alter ego (if there really is no legal difference between the shareholders and the corporation). The second is in some circumstances a director who authorizes an illegal distribution to a shareholder MAY be liable to a creditor of the corporation for the amount of the illegal distribution. The third area is a gaurantee of some sort. We typcially see these with equipment leases or real property leases. Without more information, it is not possible for me to tell you more. If you want a free consultation about these issues, please emial me your contact info.

Good luck,

Greg

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Answered on 1/16/06, 11:03 am


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