Legal Question in Business Law in Maryland

''Forfeited Close Corporation''

A Maryland close corporation is forfeited. Thereafter, a Federal agency (not knowing of the forfeiture) gives the forfeited corporation an asset. Several years later, can the sole shareholder of the forfeited corporation legally make an assignment of that asset?


Asked on 7/27/05, 9:58 pm

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: ''Forfeited Close Corporation''

First, a forfeited MD corporation can be reinstated by filing delinquent personal property returns, paying taxes/fees, and filing articles of reinstatement. But that is not necessary, as long as the corp. is not doing business.

Upon forfeiture, the director(s) become trustees, and they are required to apply corporate assets to pay corporate debts and then distribute them to shareholders. So IF ALL DEBTS ARE PAID, the shareholder (as director of the close corporation) can transfer the asset to him/herself, and then assign it to another.

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Answered on 7/27/05, 10:52 pm


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