Am I able to collect on past due account from customer if I close the business?

I have a customer with past due account. If I want to close the business, can I still file to collect from the customer?

Asked on February 21, 2019 under Business Law, New Mexico

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

It depends:
1) Your business is a sole proprietorship: the money is owed to you personally, so you personally may collect (including by suing, if necessary).
2) Your business is an LLC or corporation and while you closed the business, you did not dissolve the LLC or corporation: the LLC or corporation can still collect.
3) Your business is an LLC or corporation and it "assigned" (sold or transferred by a legal document, for consideration or something of value) its accounts receivable to you personally: having taken over the right to be paid, you may collect.
4) BUT if the business was an LLC or corporation and you dissolved it without transferring the rights to the accounts receivable to you--in this case, you can't collect, since the entity which had the right to collect ceased to exist without transferring that right to anyone else.


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