The Mississippi Supreme Court, the Court has again looked at a question about claims involving dissolved corporations. This opinion reminds us again of the many issues that surround dissolved corporations.
At common law, one a corporation was dissolved, it was dead in the eyes of the law. To mitigate the harshness of this rule, many states including Mississippi have adopted corporate-survival statutes. These statutes temporarily extend the life of the corporation. Mississippi’s corporate survival statutes are codified as Miss. Code Ann. Sections 79-4-14.05 to 79-4-14.09. Under Mississippi’s corporate survival statutes:
- A dissolved corporation continues its corporate existence but may not carry on any business except what is necessary to wind up and liquidate its business;
- The dissolution does not prevent the commencement of legal action by or against the corporation;
- The dissolution does not abate or suspend a pending proceeding;
- The dissolution does not terminate the authority of the registered agent;
- A dissolved corporation may dispose of known claims by notifying claimants in writing of the dissolution. If proper notice is given, any such claims are barred if the claimant does not make a claim within 120 days. If the claim is rejected by the dissolved corporation, the claimant must commence an enforcement action within 90 days of receiving the rejection notice.
- A dissolved corporation may also publish notice of its dissolution one time in a newspaper of general circulation and request that person with claims present them. After proper publication, claims are barred unless the claimant files suit within three years after the publication date.
There are many takeaways from these statutes. For the corporation, it is important to take the appropriate steps to ultimately cut off liability. For a creditor or tort claimant, it is important to understand the potential time limitations after which your claim may be barred.
One of the many problems that can occur when you simply allow a corporation to be administratively dissolved rather than properly dissolving the corporation is discussed in our previous blog on whether an Administratively Dissolved Corporation can maintain a breach of contract action.