Never Marry Pen to Paper Without Knowing the Consequences!

business coach May 09, 2019

By Philip E. Goss, Jr., Esq.

 

There is a very interesting and useful Internet tool that I recently became acquainted with: the Wayback Machine. Obviously, this tool is not something related to actual time travel. However, it allows a look back into the vast world of the Internet. This tool, maintained by a not-for-profit public entity, is basically an Internet archival service. Should you require something that was previously published on the Internet, this tool can take you there.

I recently used this tool to prove that someone partially pilfered my client’s Internet web content. Simply amending or deleting the content of web pages does not erase what was a part of the Internet in days gone by. 

Many times in our business and personal lives, an incorrect filing can be remedied. Who among us has not filed an amended tax form or corrective deed to remedy an innocent mistake? Amended filings are very common.

However, there are several documents that, once filed, cannot be walked back from.

One example in my home state of Florida is the filing of voluntary dissolution of corporate entities. To review, you operate under a corporate umbrella to protect your personal assets. Maintaining corporate structure and filing appropriate and required reports keep that protection in place.

 

Should you cease operation of a business that was operated under a corporate structure, I always suggest that you maintain the corporation for a period of time exceeding by at least one year the longest statute of limitations your state provides that a party can sue your defunct company. This provides cheap insurance. In Florida, depending upon the type of corporate entity you initially chose, you will not pay more than $150.00 per year. Additionally, a null tax return may be required along with other basic filings.

What do you get for this effort many of you may believe to be unnecessary? If your old company is sued, absent a personal guarantee or allegations of fraud, the company should be the sole defendant.

So, what happens if you simply cease paying the annual fee? If this happens and the company is sued, you will likely be named as a defendant, as after approximately six months of past due fees, the state will administratively dissolve your company. In that event, all is not lost, as you will be able to reinstate the company by paying the past due required fees, plus, at least in Florida, the sum of $500.00 per year of dissolution. This should remove you as a defendant and protect your personal assets. While this sum seems egregious, it is far better than being personally sued.

The absolute worst thing you could have done or could ever do, and which is the lesson of this column, is to ever file voluntary articles of dissolution! These are documents that you file with your state’s Department of Corporations, voluntarily ending the existence of your corporate entity. Many people who fail to seek legal advice believe this is a logical and necessary step. However, should you voluntarily dissolve your corporation you can never (at least in Florida and many other jurisdictions) reinstate your corporation to active status, no matter the fees or penalties you are willing to pay, and, in this event, you will incur personal liability as the last officer and director of the corporation. File this action under fundamental error!

Another example of actions that, once performed, cannot be reversed under normal circumstances is the execution of most legal documents for the purchase of goods and services. As discussed in prior columns there is an urban legend which many people believe to be universally true, that all written transactions or contracts automatically are governed by a built-in right of rescission wherein for a period of time you can decide to terminate your obligation thereunder with no penalty or liability.

Every state is different in what does fall under a right of rescission, but it is my strong advice that you never sign a contract or obligate yourself to do anything that you are not 100% ready and willing to do.

The hands of time cannot be stopped or reversed. Take no steps or actions that cannot be amended!

 

 


Attorney Phil, Jr. welcomes any email comments or questions at [email protected] and will attempt to respond personally, time permitting.

 

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