Legal Question in Construction Law in Washington
Business Entities
As a building contractor and business owner, I see people getting more sue happy that in previous years. Would it lower my exposure to suit if I were to dissolve the previous LLC and create a new one every year?
1 Answer from Attorneys
Re: Business Entities
Probably not. Your corporate entity has to maintain a presence with the Secretary of State for two years after it is dissolved so that persons who are intent on suing you can still do so.
I honestly do not think that litigation rates are increasing per se, but rather that attorneys are not as quick to resolve cases as perhaps they used to be.
Your risk exposure is not enhanced by dissolving entities. If a plaintiff could prove that was your intent, then they would have a basis to 'pierce the corporate veil' and find you and perhaps your officers personally liable, which defeats the purpose.
Frankly, the way to stay out of court is to: 1. Pay your taxes 2. Pay your rent 3. Pay your lawyer and 4. Pay your accountant/CPA 5. Stay in good with L&I, 6. have a written agreement with your customers so that there are no questions what your agreement encompasses, 7. write down the basis for change orders so there can be no argument about who ordered what and who agreed to pay for what, and 8. return phone calls 9. Show up when you say you will, no matter what.
If you can do that, I can darn near promise you that you will not attract litigation-happy customers, and isn't that all we all really want?
Hope this helps. Elizabeth Powell
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