If you incorporate but the corporation becomes inactive, does it then become a sole proprietorship?
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If you incorporate but the corporation becomes inactive, does it then become a sole proprietorship?
Asked on September 5, 2014 under Business Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
No, an inactive corporation does not become a sole proprietorship--corporations, whether active or inactive, do not turn into sole proprietorships. The assets of the corporation, including the name, intellectual property (e.g. trademarks, copyright), accounts receivable, etc. could be transferred or sold to a sole proprietorship, and the corporation then dissolved.
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