The Company That Owes You Money Dissolved: Can You Still Sue It in California?

Last updated: November 2026. Reviewed by Pavel Kolmogorov, California business litigation attorney (State Bar No. 321018).

Yes. A California corporation that has dissolved continues to exist for winding up, and that includes defending lawsuits, so it can still be sued. (Corp. Code, § 2010, subd. (a).) If its assets already went to the owners, you may pursue the shareholders or LLC members up to what each received. That claim must be filed before the limitations period ends or within four years after dissolution, whichever comes first. Kolmogorov Law, P.C. handles these cases in Orange County, Los Angeles, and across California.

Call (909) 235-6116 or contact us online to discuss a claim against a dissolved company, or a lawsuit that names you as its former owner.

Dissolution does not erase the debt

Owners sometimes treat a certificate of dissolution as a finish line. The law treats it as a change in what the company is allowed to do.

A dissolved corporation "continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it" and discharging its obligations. (Corp. Code, § 2010, subd. (a).) A pending case does not abate because the company dissolved. (Corp. Code, § 2010, subd. (b).) The California Supreme Court put it this way: a corporation's dissolution "is best understood not as its death, but merely as its retirement from active business." (Penasquitos, Inc. v. Superior Court (1991) 53 Cal.3d 1180, 1190.)

LLCs follow the same pattern. An LLC that has filed a certificate of cancellation continues to exist to wind up, to prosecute and defend actions, and to pay what it owes. (Corp. Code, § 17707.06, subds. (a), (b).)

Who you can sue after a corporation or LLC dissolves

The statute gives a creditor two targets.

The first is the dissolved company itself, to the extent of its undistributed assets. Those assets expressly include insurance that may be available to satisfy the claim. (Corp. Code, § 2011, subd. (a)(1)(A).)

The second is the owners, if assets were distributed to them. A shareholder is liable for the lesser of two amounts: a pro rata share of the claim, or the corporate assets that shareholder received on dissolution. (Corp. Code, § 2011, subd. (a)(1)(B).) Members of a dissolved LLC are liable to the extent of the LLC assets distributed to them on dissolution, with a limited statutory right to seek contribution from other members or managers. (Corp. Code, § 17707.07, subd. (a)(1)(B).)

Two consequences follow. An owner who took nothing out at dissolution owes nothing under these sections. And because the claim follows the distribution, tracing who received what is the first job.

The four-year outer limit on claims against owners

This is the deadline creditors tend to miss.

A claim against a shareholder under the dissolution statute is extinguished unless the creditor sues before the earlier of two dates. One is the expiration of the statute of limitations on the underlying claim. The other is four years after the effective date of dissolution. (Corp. Code, § 2011, subd. (a)(2).) The LLC statute uses the same two dates for members. (Corp. Code, § 17707.07, subd. (a)(2).)

"Earlier" is the word that matters. A claim with time left on its own clock can still be cut off against the owners four years after dissolution. Our statutes of limitations guide covers the underlying periods.

So the first thing I pull is the Secretary of State filing date.

Serving a company that no longer has an office

Service is where these cases stall. The registered agent has resigned and the office is closed. Process may be delivered to an officer, a director, or a person having charge of the corporation's assets. If none can be found, it may go to any agent who could have been served at the time of dissolution. When none of them can be found with due diligence, shown by affidavit, the court may order service on the Secretary of State. That service is complete on the 10th day after delivery. (Corp. Code, § 2011, subd. (b).) A parallel rule covers LLCs and adds managers and members to the list. (Corp. Code, § 17707.07, subd. (b).)

Our guide on how to sue a company explains ordinary service.

When the dissolution was the maneuver

Some dissolutions are orderly. Others are a way to leave a creditor holding nothing.

A corporation winding up is supposed to determine that its known debts and liabilities have been paid or adequately provided for before the board distributes what remains. (Corp. Code, § 2004.) The LLC rule is the same in substance. (Corp. Code, § 17707.05, subd. (a).) When owners skip that step and pay themselves first, the capped claim described above is only one option.

The dissolution statute expressly leaves intact a creditor's rights under the Uniform Voidable Transactions Act. (Corp. Code, § 2011, subd. (a)(3).) Our page on fraudulent transfers explains those claims. If the owners ignored the corporate form all along, alter ego liability may reach further than what they received. And if the same business reopened under a new name, read our page on successor liability.

A dissolved company is not the same as a suspended one, which we cover on our suspended corporation page.

If you are the former owner who was sued

Do not ignore the complaint because the company is gone. The company can still be sued, and so, within limits, can you.

Your exposure under the dissolution statutes is capped at what you received on dissolution. That is why closing records matter: the final balance sheet and proof of what each owner took.

Check the dates next. If more than four years have passed since the effective date of dissolution, the statutory claim against you as a shareholder or member is extinguished, subject to a narrow exception in the statute.

Then look for insurance. A policy that covered the company during the relevant period may respond, so tender early.

The cap does not answer every theory. Claims that you personally committed a tort, guaranteed the debt, or received a voidable transfer stand on their own footing.

What to bring to the first meeting

Creditors should bring the contract or invoices, the Secretary of State record showing the dissolution date, and anything showing where the company's assets went. Former owners should bring the complaint, the dissolution filings, the final tax return and balance sheet, records of distributions, and every insurance policy the company carried.

Frequently asked questions

The company that owes us money filed a certificate of dissolution last year. Can we still sue it or its owners?

Yes to both, within limits. In California a dissolved corporation keeps existing for winding up and can be sued, with recovery limited to its undistributed assets and any available insurance. If assets were distributed, each shareholder can be reached up to the amount received. The four-year outer limit in Corporations Code section 2011 has not run, but the ordinary limitations period still applies.

Can you sue a dissolved LLC in California?

Yes. Under Corporations Code section 17707.06, a California LLC that has filed a certificate of cancellation continues to exist to wind up its affairs and to prosecute and defend actions. A claim can be enforced against the LLC's undistributed assets, including insurance, and against members to the extent LLC assets were distributed to them on dissolution.

I was a shareholder of a corporation we dissolved two years ago and I was just named in a lawsuit. Am I personally liable?

Possibly, but California caps the statutory exposure. Under Corporations Code section 2011, a former shareholder is liable for the lesser of a pro rata share of the claim or the assets received on dissolution, and not more than the amount received. If you took nothing, that claim fails. Separate theories, such as a personal guaranty or alter ego, are analyzed on their own facts.

How long do you have to sue the shareholders of a dissolved corporation?

In California, a creditor must sue a shareholder of a dissolved corporation before the earlier of two deadlines: the statute of limitations on the underlying claim, or four years after the effective date of dissolution. After that, the cause of action against the shareholder under Corporations Code section 2011 is extinguished. LLC members get the same two deadlines under section 17707.07.

How do you serve a dissolved corporation in California?

Deliver the summons to an officer, director, or person in charge of the corporation's assets or, if none can be found, to an agent who could have accepted service when it dissolved. If no one can be located after diligent effort, California law lets the court order service through the Secretary of State on a showing by affidavit. Service made that way is deemed complete on the tenth day.

Talk to a California business litigation attorney

If a dissolved company owes your business money, or you have been sued over a company you closed, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is located at 327 Magnet, Irvine, CA 92618, and represents businesses in Orange County, Los Angeles, and throughout California.

This page provides general information about California law and is not legal advice. Outcomes depend on the dissolution date, the distributions, and the court.