Can It Be So? Court Holds That A Nebraska Corporation Is Not A Corporation

Section 2010(b) California Corporations Code provides that no action or proceeding to which a corporation is a party abates by dissolution of the corporation.  The statute imposes no time limit on suing dissolved corporations for pre-dissolution activities.

In Robinson v. SSW, Inc.,209 Cal. App. 4th 588 (2012), the Court of Appeal considered whether Corporations Code Section 2010 applies to a dissolved Nebraska corporation.  This was an issue because the cornhusker state imposes a five year limit on these suits and the plaintiff did not sue the defendant until after that five-year period had elapsed.  

In tackling this question, the Court of Appeal began by noting that California courts have not agreed on whether Section 2010 applies to foreign corporations.  See Riley v. Fitzgerald, 178 Cal. App. 3d 871 (1986) and North Am. Asbestos Corp. v. Superior Ct., 180 Cal. App. 3d 902 (1986).  The Court then reviewed Corporations Code’s definitions of “corporation” (Section 162) and noted that the definition required an understanding of when a corporation is “organized” under the General Corporation Law and what corporations are “subject to” the General Corporation Law under Section 102(a).  The Court then concluded that Section 2010 does not apply to foreign corporations.  If you’ve ever wondered what it means to organize a corporation, this is the case for you.

 

Published In: Business Organization Updates, Civil Procedure Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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