When breaking up a corporation between two DBAs who becomes responsible for the payroll and lease affiliated with one of the DBAs that is no longer going to be part of the corporation

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When breaking up a corporation between two DBAs who becomes responsible for the payroll and lease affiliated with one of the DBAs that is no longer going to be part of the corporation

When breaking up a corporation between two
DBAs who becomes responsible for the payroll
and lease affiliated with one of the DBAs that is
no longer going to be part of the corporation

Asked on February 15, 2018 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If the original corporation continues in existence, even if under different ownership or name or while spinning off part of its operations, the corporation remains responsible for its obligations, including lease and payroll. Whatever entity has the same EIN number--the same legal identity--as the original corporation is responsible for the corporation's obligations.
If the corporation will not continue and both of the two DBAs will be wholly new entities, then these obligations do not automatically go to one or the other. Rather, a new entity has to voluntary assume or take on these obligations.


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