Should I dissolve my company if it is under investigation?

Posted by Clyde Hutchins | Oct 04, 2016 | 0 Comments

When faced with an investigation by the Attorney General's Office, a common consideration for single owner limited liability companies is whether to dissolve. It may seem that logic would dictate that dissolution would end the investigation, and consequently, any liability or civil penalties that might flow from the investigation. Moreover, in the case of Wyoming limited liability companies, the state has been known to dissolve them for failure to respond to a subpoena. One might think that it makes sense to ignore the subpoena and allow the state to dissolve the company.

However, things are not so simple. Dissolution, whether voluntary or involuntary, can expose the company owner to increased liability. The limited liability company form is specifically created to provide limited liability for the company owner. This gives the owner peace of mind that he will not be held liable for many of the actions or omissions of the company. When a company is dissolved, the owner can lose that limited liability protection, especially when the company is involuntarily dissolved by the state.

Additionally, under the consumer protection act, the individuals involved in the alleged violation can be held directly liable irrespective of the limited liability company form. The consumer protection act essentially creates a "piercing the veil" option to allow consumers to proceed against those directly involved in the wrongdoing. Dissolution may have no effect on the potential liability of a company owner directly involved in the violations.

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Mr. Hutchins started his career as a lawyer in Cheyenne, Wyoming. First gaining experience as a law clerk for the district court judges, Mr. Hutchins entered private practice with a Cheyenne firm focused on civil litigation, business law and some general practice law. Later, Mr. Hutchins went to Alaska, where he was the chief litigator for a firm that engaged in bond law, corporate law, securities law, and the broad reach of municipal law. Mr. Hutchins returned to Cheyenne to represent the State of Wyoming in the national tobacco arbitration. While in that position, he developed the consumer protection unit for the Wyoming Attorney General's Office. He led over 120 investigations and enforcement actions in Wyoming and worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado. Mr. Hutchins relocated to Colorado in 2016 and founded Harmony Law. Mr. Hutchins has established Harmony Law in three principal areas of law. First, it is a general practice firm in the areas of business law, estate planning and family law. Secondly, it is a civil litigation firm, practicing law in state and federal courts throughout Wyoming and Colorado. Finally, it is one of the few firms in Wyoming or Colorado that focuses on consumer protection law.


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Harmony Law is one of the few law firms in Colorado and Wyoming that focuses on consumer law. Mr. Hutchins is a member of the National Association of Consumer Advocates and state chair for Wyoming. If you have a consumer law issue, please feel free to call 970-488-1857 and speak with Mr. Hutchins.

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