Can I file a small claim suite when the other party closed their business?

UPDATED: Oct 2, 2022

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Can I file a small claim suite when the other party closed their business?

I’m running a small business and did some works for an auto dealership. They recently closed down the dealership permanantly but owes me about $1550.

Asked on July 31, 2019 under Business Law, New Jersey


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If the other business was a sole proprietorship, you can sue the owners for the money: in a sole proprietorship, the owner is the business. But if it is was an LLC and corporation, it is a separate entity from the owner(s), and the owner(s) are not liable for its debts. So if it was an LLC or corporation and has closed down, there's no point in suing--there is no one to sue, no one who is liable, and no one who will pay you money.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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