Legal Question in Business Law in Iowa

As a franchise attorney I can say the answer depends on what contract(s) you used with your suppliers. If they were entered into by an appropriate officer of your corporation, on behalf of the corporation, and you didn't personally guaranty any obligation, the corporation is who they must look to for payment. They can always try to sue you personally. In that event, you must respond and raise the appropriate corporate defenses. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Attorney

Franchise Foundations APC

It depends on several factors, including, did you hold yourself out as a corporation with regard to these vendors? Did you follow all of the rules of being a corporation (annual minutes, election of officers, etc.)? Did the corporation have sufficient capital? Did you personally guaranty any of these debts? How was the liquidation of the corporation handled? You should discuss this matter directly with an attorney.

I disagree with Mr. Franchise. Things get done a little differently in Iowa.

The key to this in small corporations is what the proprietor did with his or her checkbook. That'll tell the court all it needs to know about whether you were serious about the corporate form of operation or not. If you used the checkbook for personal expenses or you used it to pay family expenses a competent attorney can and will poke holes in the corporate shield. Briggs Transportation v. Starr Sales Co.