If a franchise company owner dissolves the corporation, can he still collect open receivables?
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If a franchise company owner dissolves the corporation, can he still collect open receivables?
A local handyman company paid all creditors and dissolved his business, however he has clients that still owe him money for work completed. Can he still try to collect from those clients and if he has to file a claim, under which name can he file?
Asked on February 7, 2019 under Business Law, Georgia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
If the company was a corporation and was dissolved, he could only collect if the accounts receivable had been sold or transferred (e.g "assigned") to him formally (and so with proof of this having been done) by the corporation prior to its dissolution--that is, when it was still in existence to transfer the right to collect. If that was not done, then it is too late to transfer the accounts receivable to him now, and since the corporation is dissolved, it cannot collect--so without a prior transfer of the the right to collect, he cannot collect.
If the right to the accounts receivable was transferred to him properly, then he would file any claims under his own name.
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