Legal Question in Business Law in California
personal liability for corporate debt
Several years ago my corporation hired a lawyer, and his bill remains unpaid as the Franchise Tax Board has seized the funds of the corporation ($2,000.00) until the last tax returns are filed. Ok. I would like to pay the lawyer the $1,000.00 he is due! However, there are no funds, no corporation is no longer in business. Today, the lawyer 's collection agency placed a negative report on Experian for me personally, not the corporation. I'm in California, is that legal? Isn't that a benefit of a corporation, to protect us personally?
2 Answers from Attorneys
Re: personal liability for corporate debt
Even though the legal work was for your cooperation, we would have to review your retainer agreement to see who signed it and what capacity.
We can then tell you the procedures for trying to remove the problems from your credit. Please contact us if you have any other question.
Re: personal liability for corporate debt
Is there a written fee agreement with the attorney? If so, who is identified as the "client?" Even if there isn't a written fee agreement, you need to review everything (letters, invoices, etc.) to determine who the "client" is, or who the lawyer reasonably believed the "client" to be. If the "client" is the corporation, you personally shouldn't owe anything, unless he is trying to pierce the corporate veil or claiming you are a "promoter". Did he form the corporation? If the "client" is you personally, then you personally owe the money.
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