Chapter 2-6 Officer and Director Liability—State Revocation of Corporate Status

• Jurisdiction: United States

2-6 Officer and Director Liability—State Revocation of Corporate Status

2-6:1 Overview

A corporation's officers and directors are normally protected from personal liability by the corporate form. State revocation of corporate status, although not a cause of action in which a private litigant will initiate proceedings, can be a valuable exception to the general rule regarding officer and director liability. Locating the certificate of termination is the only concern of a litigant attempting to establish officer and director liability based upon state revocation of corporate status.

2-6:2 Elements

2-6:2.1 Administrative Termination by the Secretary of State

(1) A filing entity defaults on a required act

• The Secretary of State may terminate a filing entity's existence if the Secretary finds that:
• The entity has failed to file a report within the period required by law;
• The entity has failed to pay a fee or penalty prescribed by law when due and payable;
• The entity has failed to maintain a registered agent or registered office in this state as required by law; or
• The entity has failed to pay a fee required in connection with the filing of its certificate of formation, or payment of the fee was dishonored when presented by the state for payment.¹⁴⁵

(2) The Secretary of State notifies the filing entity of the specific default.

• Before the Secretary of State may terminate a filing entity, the Secretary must send notice to the filing entity of the specific default.¹⁴⁶

(3) The filing entity does not timely cure its default.

• The filing entity has until the 91st day after the Secretary of State mails the notice to cure the following defects:

• The entity has failed to file a report within the period required by law;
• The entity has failed to pay a fee or penalty prescribed by law when due and payable; and
• The entity has failed to maintain a registered agent or registered office in this state as required by law.¹⁴⁷

• The filing entity has until the 16th day after the Secretary of State mails the notice to cure the following defect:

• The entity has failed to pay a fee required in connection with the filing of its certificate of formation, or payment of the fee was dishonored when presented by the state for payment.¹⁴⁸

(4) The Secretary of State issues a certificate of termination.¹⁴⁹

• The certificate will be on file with the Secretary of State.

2-6:2.2 Judicial Termination by the Attorney General

(1) A filing entity defaults

• The Attorney General may terminate a filing entity's

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