On July 1, 2015, ABC company filed its Articles of Incorporation with the State

Question

On July 1, 2015, ABC company filed its Articles of Incorporation with the State of California. All of their correspondence and contracts list ABC as ABC Inc. On July 10th, XYZ Inc. sues ABC for breach of contract. Then on July 20th, ABC gets notice from the State of California that their Articles of Incorporation have been rejected. ABC forgot to list its Registered Agent on the forms. How is ABC going to be treated in the lawsuit filed against them by XYZ Inc? Will they be a corporation - with limited liability - or a partnership with unlimited liability? Please discuss.

Explanation / Answer

In the lawsuit filed by XYZ against ABC they would be treated as a partnership with unlimited liability as their application for the articles of incorporation has been rejected. This would thereby change the status of ABC on the contracts list from a corporation with limited liability to one with a partnership with unlimited liability.

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