Legal Question in Business Law in California

Sounds like you may be right, but there are still a number of caution flags being furiously waved in my head. The best strategy would be to have an attorney review the agreement, the status of the company, whatever this owner lawsuit might be, and the answers to a few factual questions from you. Absent that review, no attorney will be able to provide you with an opinion that you would want to stand on if you're thinking about opening a competing business. I would also note that in general after August 2008, California only enforces non-competition agreements in particular circumstances. You're welcome to contact my office if you want to pursue an opinion letter. - Cathy

A nondisclosure agreement ("NDA") is not the same as a noncompete agreement. The former is generally enforceable; the latter frequently is not. Also note that part of the boilerplate terms in many contracts is a successors and assigns clause, that says, in effect, that the contract is binding upon and inures to the benefit of the parties and their successors, heirs and assigns.

Of course, a document labeled as an NDA may also contain noncompete provisions and/or have the effect of stifling competition. To such an extent, the agreement may be unenforceable, but do bear in mind that the law protects trade secrets even if that has an anticompetitive effect.

Please note also that dissolved companies are not necessarily dead and gone. After filing dissolution papers with the Secretary of State, corporations and LLCs continue to have the power and the duty to wind up their affairs, collect their receivables, pay their bills, liquidate their assets and otherwise close up shop in an orderly way; this includes the ability to sue and be sued. A dissolved business entity should not, however, engage in any new or on-going dealmaking that is not reasonably related to winding up and termination.

I would therefore venture to guess that the NDA is still valid. The real issue for you might be, even if it is valid, whether anyone cares enough to sue you, and if they did, would they be able to show any recoverable damages from your disclosure?