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Does Dissolved California Corporation Have Officers And Directors?
Wednesday, May 18, 2016

It might be reasonable to assume that a dissolved corporation no longer has any officer and directors.  However, the California General Corporation Law seems to assume that dissolved corporations continue to have directors and officers. California Corporations Code Section 2011(b) provides that summons and other process against a dissolved corporation “may be served by delivering a copy thereof to an officer, director or person having charge of its assets or, if no such person can be found, to any agent upon whom process might be served at the time of dissolution”.

In Core Distrib. v. Xtreme Power (USA) Inc., 2016 U.S. Dist. LEXIS 62128 (D. Minn. May 10, 2016), Judge Donovan W. Frank considered whether a plaintiff had properly served a dissolved California corporation by personally delivering a copy of the summons and complaint on an individual who the plaintiff “believed to be” the chief executive officer of the corporation.  The corporation argued that it no longer had any directors and officers.  Judge Frank, however, concluded that the corporation had been validly served:

However, the California Supreme Court has since made clear that “California no longer follows the common law rules with respect to . . . the dissolution of a corporation.” Penasquitos, Inc. v. Superior Court, 53 Cal. 3d 1180, 283 Cal. Rptr. 135, 812 P.2d 154, 156 (Cal. 1991). Indeed, under the statutory scheme that replaced the common law rule in California, “a corporation’s dissolution is best understood not as its death, but merely as its retirement from active business.” Id. at 160; see also Cal. Corp. Code § 2010 (“A corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it and enabling it to collect and discharge obligations, dispose of and convey its property and collect and divide its assets, but not for the purpose of continuing business except so far as necessary for the winding up thereof.”). Thus, because dissolved California corporations continue to exist as legal entities, Xtreme’s argument is without merit.

Just when I thought I was out… they pull me back in

But how does one know who are the directors and officers of a dissolved corporation?  It is possible to identify at least some of the directors at the time of dissolution by reviewing the Certificate of Dissolution.  Section 1905(a) of the Corporations Code requires that in the case of a non-judicial dissolution the certificate be signed by a majority of the directors then in office.  It is unclear whether these directors (and any other directors who do not sign) are essentially directors for life following dissolution.  In other words, is this a position from which one can never resign?

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