Thought I was incorporated....

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In 2000 I paid an accountant to be incorporated. I was told that it is important due to the fact if my business was ever sued that they wouldn't be able to touch me personally. I found out during the process of someone suing me that I was not incorporated the year I thought i was. I was incorporated actually in 2003. In the mean while the person who is suing me is saying I wasn't incorporated when I opened account with them. Which in my eyes I was incorporated in 2000. When I opened the account I was incorporated. My accountant failed to tell me that he received paperwork that the name I choose was not available.... Which I have a hard time believing that it was three years for someone to inform him that the name was taken. He choose another name & signed my name. I never knew any difference. I have been running my business with this incorporation name and a dba behind it. I have a bank account, whenever I have been asked from companies we did work for I gave this info with my EIN number, this same accountant has used the first corporation name for totaling 12 years. The accountant has been doing my taxes for 12 years.....NEVER told me my corporation name changed. Now the company that is suing me is suing me personally because in their eyes my business is a sole proprietor. I have to file bankruptcy for the business & personally. Any advice?????? Or thoughts????
Thanks in advance,

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Glitch99 (Apr. 21, 2012 @ 11:46p) |

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Daisysuzy (Apr. 22, 2012 @ 12:24a) |

I don't have much to add except best of luck getting the matter resolved, and please tell us what the outcome is.

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You are talking about declaring bankruptcy and a potential malpractice claim. Talk to an attorney, not FWF.

Were you incorporating with the plans of being sued? And this sounds very unfortunate.

Which in my eyes I was incorporated in 2000.Do a corporate search in the state you're incorporated in. That is the date the business was legally incorporated.Any advice?????? Or thoughts????Hire a lawyer and review your options.

Do you have proof your account has represented you were incorporated in 2000, and/or when you started doing business with the other party?

Even that would be a weak argument for going after your account; you've had 9 years to re-establish your relationships as a corporation.


What advice does your accountant have?

If your accountant really did choose a different name and then signed the paper with your signature, isn't that illegal? It seems like pretty straight forward forgery. Your post makes it seem like you are putting the blame with the accountant, are you trying to see if that would stick legally?

Accountants often have professional liability insurance policies

If the facts are as you state, you may have an excellent claim and your losses may be borne by his insurer with no need for you to file bk

you should ask your accountant if he has such insurance and if he says no, hire a lawyer

I have a bankruptcy attorney. He just seemed to unravel the mess of figuring out why the person that is suing is suing me personally.

Al3xK said:   Were you incorporating with the plans of being sued? And this sounds very unfortunate.


No. I was told in 2000 when I seeked out advice from accountant of how to run my business finances that I needed to be incorporated to protect my personal assets.

elektronic said:   You are talking about declaring bankruptcy and a potential malpractice claim. Talk to an attorney, not FWF.


I was just reading some stuff online. I ran into this site seeking some advice. My bankruptcy attorney just unraveled this crazy mess and finally figured out why the company is suing me personally. I was asking you seem to be wise people what you thought.

DeGlass said:   Do you have proof your account has represented you were incorporated in 2000, and/or when you started doing business with the other party?

Even that would be a weak argument for going after your account; you've had 9 years to re-establish your relationships as a corporation.

I got a paper from him saying my corporation name. I just found out that I am not this corporation name. I mean like just this week. This accountant has done my taxes for 12 years. Why would he not mention in 2003 that this happened? I actually was just in his office and he started my paperwork with my old incorp name and I told him what I found out. His secretary came in quickly scrambling to tell him. I was not realizing what it all meant till today with my bankruptcy attorney. I have appointment this next week with him and it is going to be discussed.


What advice does your accountant have?

Daisysuzy said:   I got a paper from him saying my corporation name. I just found out that I am not this corporation name. I mean like just this week. This accountant has done my taxes for 12 years.
So you've been doing business as a non-existent, "old incorp" name for 12 years?
And your accountant has been mis-representing that over the past 12 years?

You should be talking with a malpractice attorney first thing Monday.

Daisysuzy said:   I have a bankruptcy attorney. He just seemed to unravel the mess of figuring out why the person that is suing is suing me personally.

A bankruptcy attorney is not the right person to determine what liability your accountant has, or what insurance coverage may be available to let you avoid bankruptcy.

A bk attorney is only concerned with doing your bk to earn his fee.

You would be foolish to file personal and business bk if the facts are as you state them and the accountant has insurance . You better find this out before proceeding with bk

What is the dollar amount you are being sued for?

Did you personally do the work which lead to the lawsuit? If so I doubt a corporation would do you any go whatsoever. My take is that corporations are set up to protect the owners for the wrongful acts of others not their own mistakes.

Then again I am not lawyer just suggesting that the accountant's mistake may be a red herring. Like already suggested get a real lawyer involved to sort it out.

SUCKISSTAPLES said:   Daisysuzy said:   I have a bankruptcy attorney. He just seemed to unravel the mess of figuring out why the person that is suing is suing me personally.

A bankruptcy attorney is not the right person to determine what liability your accountant has, or what insurance coverage may be available to let you avoid bankruptcy.

A bk attorney is only concerned with doing your bk to earn his fee.

You would be foolish to file personal and business bk if the facts are as you state them and the accountant has insurance . You better find this out before proceeding with bk

What is the dollar amount you are being sued for?


$90,000.00 ( ninety thousand dollars). !!!

bugged said:   Did you personally do the work which lead to the lawsuit? If so I doubt a corporation would do you any go whatsoever. My take is that corporations are set up to protect the owners for the wrongful acts of others not their own mistakes.

Then again I am not lawyer just suggesting that the accountant's mistake may be a red herring. Like already suggested get a real lawyer involved to sort it out.


It actually is for material. We were making payments on it for 3 months and were 1 day late and the attorney representing the company filed judgement against us. I hired an attorney. The attorney tried to file paperwork to tell the judge that we were incorporated and no one really cared. ( When we were paying every month on time the attorney was going and filing all these things saying we weren't responding and we never knew it was going on). The attorney sent paperwork to my old address even though the place we got material from he was representing sent any billing to our new address. The attorney I hired told me I needed to file bankruptcy. So I hired bankruptcy attorney.

The reason my corporation would help me is because I opened account in 2001. When filling paperwork for account I marked I was incorporated. Guess what? I actually was not incorporated..... In 2000 when I paid accountant $800 to incorporate me from the year of 2000-2003 he had to be informed that the name was taken and in 2003 changed name and signed my name on form. If I would have been incorporated in 2000 then the company would be suing my corporation not me personally....so it would make a huge difference.

From everything I've heard, the corporate veil is incredibly easy to pierce in the case of small or tiny corporations.

Daisysuzy said:   bugged said:   
The reason my corporation would help me is because I opened account in 2001. When filling paperwork for account I marked I was incorporated. Guess what? I actually was not incorporated..... In 2000 when I paid accountant $800 to incorporate me from the year of 2000-2003 he had to be informed that the name was taken and in 2003 changed name and signed my name on form. If I would have been incorporated in 2000 then the company would be suing my corporation not me personally....so it would make a huge difference.


Is this a lawsuit for nonpayment of materials sold to you by another company?

lol its funny how all you people try to talk about legal stuff but don't know what you are talking about and give really really bad advice. shame on you for just making stuff up that is false like its true.
anyway I am an attorney but probably not licensed in your state there is a 1 in 50 chance of that..
but i suggest you read this: http://en.wikipedia.org/wiki/De_facto_corporation_and_corporatio...
in essence, you probably will be treated as a corporation, get a deposition of the accountant that screwed up.
piercing the corporate veil is not as easy as one guy suggested, but it is possible, mainly if you were a huge conman running scams.
But all in all you are in over your head get a lawyer.

If you are going to file personal bankruptcy because of a $90,000 claim against you personally, what the heck did were you trying to protect by incorporating?

You initially implied you were being sued, when in reality you defaulted on a debt. If you were paying and intended to continue paying, a judgement really doesnt change anything - just make arrangements to keep paying.

And I'm confused - if this company is claiming you are liable for the debt because you werent actually incorporated, then the incorporated business isnt liable for the debt. Why do you need to pay the expense of the corporation filing bankruptcy as well?..

I'm guessing there's more to the story you arent telling us?

Glitch99 said:   You initially implied you were being sued, when in reality you defaulted on a debt. If you were paying and intended to continue paying, a judgement really doesnt change anything - just make arrangements to keep paying.


They probably were sued, for nonpayment/late payment . There was likely an acceleration clause causing the full amount to become immediately due, so they couldn't just make payment

Though I agree there is more to the story since not one business sues over being "1day late" as op claims

Well I am telling you the story exactly the way it happened..... I hired an attorney as soon as judgement papers were sent to me through fax machine from attorney.....I beleived we had made a payment plan. The payment was rough on us because it was our slow time. The only part that I left out which really has no bearing to the question I had asked at the beginning is: I will try to make short and to the point
One of the 4 if my partners got all the mail....
This person made payment plan and really wasn't reachable amount for us
I was not aware of anything..... Got no paperwork sent to address I had always used
The partner signed all of our names to agreement of payment plan
When I found out I called attorney explained can't pay that large of amount could he be more reasonable he said no I said we will have to file bankruptcy
We went to a discovery hearing.....
He put judgement against us.....
I could not understand why personal and why not just business

I am telling the truth..... We were 1 day late. I tried to make different arrangements & he wouldn't.....

Why wouldn't I tell truth on here??? This is no joke to me. This is destroying my life. I could possibly lose everything.

Sorry for rambling....
Now I get it....

OliverQuackenbush said:   lol its funny how all you people try to talk about legal stuff but don't know what you are talking about and give really really bad advice. shame on you for just making stuff up that is false like its true.
anyway I am an attorney but probably not licensed in your state there is a 1 in 50 chance of that..
but i suggest you read this: http://en.wikipedia.org/wiki/De_facto_corporation_and_corporatio...
in essence, you probably will be treated as a corporation, get a deposition of the accountant that screwed up.
piercing the corporate veil is not as easy as one guy suggested, but it is possible, mainly if you were a huge conman running scams.
But all in all you are in over your head get a lawyer.



Great advice.... I read link you suggested very good info. I am definitely getting an opinion from an attorney.

Daisysuzy said:   
One of the 4 if my partners got all the mail....
This person made payment plan and really wasn't reachable amount for us
I was not aware of anything..... Got no paperwork sent to address I had always used
The partner signed all of our names to agreement of payment plan
When I found out I called attorney explained can't pay that large of amount could he be more reasonable he said no I said we will have to file bankruptcy

And your response is to cry about not being able to afford the agreement? What about the fact you never agreed to anything in the first place, which would be my first priority? Have you had this "partner" arrested yet? Or atleast sued? And if there's 4 "partners", why is the burdon falling on your shoulders? Although you said "I" through the initial post, how much of this incorporation process was actually done by you? Did you (the actual you, not "the business" you) even open the account that is now in default?

I'm guessing it is "personal not just business" because the account you opened included a personal guarantee.

You say you are going to lose "everything", but declaring bankruptcy over a $90k judgement, for a debt you've known about and intended to pay anyways, doesnt indicate there's much to be lost in the first place... With bankruptcy pending, if you just dont pay the judgement right away what are they going to be able to take?

Maybe bankruptcy is the best option, being the best way to be done with this mess and move on. Otherwise it's going to cost you alot to get everything sorted out.

Glitch99 said:   Daisysuzy said:   
One of the 4 if my partners got all the mail....
This person made payment plan and really wasn't reachable amount for us
I was not aware of anything..... Got no paperwork sent to address I had always used
The partner signed all of our names to agreement of payment plan
When I found out I called attorney explained can't pay that large of amount could he be more reasonable he said no I said we will have to file bankruptcy

And your response is to cry about not being able to afford the agreement? What about the fact you never agreed to anything in the first place, which would be my first priority? Have you had this "partner" arrested yet? Or atleast sued? And if there's 4 "partners", why is the burdon falling on your shoulders? Although you said "I" through the initial post, how much of this incorporation process was actually done by you? Did you (the actual you, not "the business" you) even open the account that is now in default?

The partner that did this is my Mother n law.....
I Take care of any thing important with business .... ( obviously not very well ....I said it so you don't have to)
I am the one who incorporated the business in 2000.
My in laws would run the business out of a shoe box if they could. I tried to bring it to a different level. Up to date : )
The account was opened in my husbands name and mine ..... On the application it asked if I was incorporated and I checked yes. It never asked anymore than that.


I'm guessing it is "personal not just business" because the account you opened included a personal guarantee.

You say you are going to lose "everything", but declaring bankruptcy over a $90k judgement, for a debt you've known about and intended to pay anyways, doesnt indicate there's much to be lost in the first place... With bankruptcy pending, if you just dont pay the judgement right away what are they going to be able to take?



Maybe bankruptcy is the best option, being the best way to be done with this mess and move on. Otherwise it's going to cost you alot to get everything sorted out.

Glitch99 said:   Daisysuzy said:   
One of the 4 if my partners got all the mail....
This person made payment plan and really wasn't reachable amount for us
I was not aware of anything..... Got no paperwork sent to address I had always used
The partner signed all of our names to agreement of payment plan
When I found out I called attorney explained can't pay that large of amount could he be more reasonable he said no I said we will have to file bankruptcy

And your response is to cry about not being able to afford the agreement? What about the fact you never agreed to anything in the first place, which would be my first priority? Have you had this "partner" arrested yet? Or atleast sued? And if there's 4 "partners", why is the burdon falling on your shoulders? Although you said "I" through the initial post, how much of this incorporation process was actually done by you? Did you (the actual you, not "the business" you) even open the account that is now in default?

I'm guessing it is "personal not just business" because the account you opened included a personal guarantee.

You say you are going to lose "everything", but declaring bankruptcy over a $90k judgement, for a debt you've known about and intended to pay anyways, doesnt indicate there's much to be lost in the first place... With bankruptcy pending, if you just dont pay the judgement right away what are they going to be able to take?

They could take my house....they already garnished my accounts. They took my sons money $425 out of his account because my name was on it.

Maybe bankruptcy is the best option, being the best way to be done with this mess and move on. Otherwise it's going to cost you alot to get everything sorted out.

The only difference when I was incorporated in 2000 and the paperwork in 2003 is the name of corporation..... The EIN number is the same on both Incorporation papers. Does that have any merit?

Daisysuzy said:   Well I am telling you the story exactly the way it happened..... I hired an attorney as soon as judgement papers were sent to me through fax machine from attorney.

.

The judgment is the last part of the lawsuit, after being served with the lawsuit and after a hearing in court. Did you not go to trial and defend yourself ?

the time to hire an attorney was at the beginning when you were served with the lawsuit (you would get a summons/complaint) . Not after. If you were never properly served, the judgment against you may be void but you would need to get it set aside . Too many things don't make sense here

Daisysuzy said:   The only difference when I was incorporated in 2000 and the paperwork in 2003 is the name of corporation..... The EIN number is the same on both Incorporation papers. Does that have any merit?Merit for what? You've already lost, the time to argue your case has passed unless you can get the judgement set aside. You really need to get a good lawyer who can figure out what is really going on. Alot of this doesnt "just happen" without you being told (or it being made available to you) exactly what is happening and why it is happening.

yes, what glitch said. it sounds like you sat on your hands and its too late to turn back the clock and fix your problem. first you were late. then next the plaintiff complained to you. next they served you with papers to sue you. what happened next is a mystery, I guess you just ignored the papers did not hire an attorney and did not show up to court. next I assume you were served with requests for discovery or notice of deposition by mail and you probably did not show up for this. then the other attorney probably filed a motion for sanctions or to dismiss, which you probably also ignored. then the judge entered a default judgement against you and now you are here complaining. I am not sure what help you want here regarding incorporation. at any point you could have jumped in the game and participated in the dispute but you buried your head in the sand. do you know what kind of help you are seeking or what anyone here can do for you?

Let's not be so quick to blame op for sticking head in the sand , lest the ostrich instruction migrate into this thread.

There's lots of times when someone isn't served and the first notice they get of a suit is a judgment against them

Op you need to clarify exactly what has happened regarding the lawsuit, whether you were served with a summons / complaint, whether you ignored a court hearing etc. A person cannot just get a judgment against you without serving you and having a court hearing .

So first you need to find out what kind of professional liability insurance your accountant has
Next you need to figure out exactly what happened regarding this lawsuit. If the only attorney you have consulted is a bk attorney, they are not going to help with these issues, they'll recommend filing bk to solve it when there may be other options which don't require bk

First of all I don't really think you read what happened to me as papers were being sent to my old address my mom n law was thinking she was taking care of it setting up payment plan when it was brought to MY attention I called attorney tried to make different arrangements.... In the mean the mean while I was trying to put head and tails of this mess myself some what together I hired an attorney that attorney filed a motion to the court to pretty much sue our corporation not us personally. They threw it out because they said we weren't incorp when we opened account. The attorney I had hired advised seek another attorney for bankruptcy.... I did. Our business is super slow in between all this you know economic times.... I got bankruptcy attorney and I did all the paperwork and in the mean time I went to a discovery meeting with attorney who is representing the company. Then I was still following through with bankruptcy still not understanding why if I was incorporated how I could be liable personally.........

I came on here to ask about incorporation information that I just found out actually on the date of yesterday..... I was made aware of the stuff about my corporation!!!! I went on intranet did a search and this came up.........soooooooo I came on this forums to ask about it. Sorry I disturbed you all. I understand why people have different names on here because of protecting their identity.

Thank you kindly for your advice....... And thoughts...... I never buried my head in the sand...... I have been digging and digging through the sand to figure what is going
on. I am short on funds to pay for extra attorney. I thought I could come sift through forums here and see if anyone who has been through what I have been and ask a question from you all .......

You have all done enough.

SUCKISSTAPLES said:   Let's not be so quick to blame op for sticking head in the sand , lest the ostrich instruction migrate into this thread.

There's lots of times when someone isn't served and the first notice they get of a suit is a judgment against them

Op you need to clarify exactly what has happened regarding the lawsuit, whether you were served with a summons / complaint, whether you ignored a court hearing etc. A person cannot just get a judgment against you without serving you and having a court hearing .

So first you need to find out what kind of professional liability insurance your accountant has
Next you need to figure out exactly what happened regarding this lawsuit. If the only attorney you have consulted is a bk attorney, they are not going to help with these issues, they'll recommend filing bk to solve it when there may be other options which don't require bk



All paperwork was sent to old address the first paperwork I saw was the paperwork he faxed me....... My mom n law gets paperwork sent to her......: she hid it for months & she tried to make a huge payment !!!


I am going to talk to an attorney Monday...... Before I talk to accountant.

Thank you for not so quick to judge.......

Actually I might go talk to the judge myself ......

Daisy did you tell the attorney who filed the motion for you about your accountants error , or did you just find out that? As ive said a couple times, you need to determine what liability your accountant has for the errors and for signing your name on Corp docs under a name you were never advised about.
Is your accountant a friend or some reason you wouldn't want to sue him or make a claim against his professional liability policy ?

You can likely find an attorney willing to take such a case for no charge to you if the facts are as you describe .

Daisysuzy said:   Actually I might go talk to the judge myself ......
Not a good idea

SUCKISSTAPLES said:   
Not a good idea


It wouldn't be a good idea in the general case. Here, the situation is complex and Daisy has problems describing it clearly, so it is a very bad idea.

Daisy, was the account with this particular vendor in your name or "the non-existent business name" with a personal guarantee from you? What about your partners, did they personally guarantee anything?

Since the accountant signed your name then handwriting analysis should prove that. What you need is a corporate attorney with the means to investigate properly. You typically have to go to a larger firm, or a well-connected firm to do this. The guy on Main street with a sign on his window is not the type you need right now.

The first consult is usually free and if you can prove this easily you may be able to get the firm to take it on contingency.

SUCKISSTAPLES said:   Daisy did you tell the attorney who filed the motion for you about your accountants error , or did you just find out that? As ive said a couple times, you need to determine what liability your accountant has for the errors and for signing your name on Corp docs under a name you were never advised about.
Is your accountant a friend or some reason you wouldn't want to sue him or make a claim against his professional liability policy ?

You can likely find an attorney willing to take such a case for no charge to you if the facts are as you describe .
Also at the top of the to-do list is finding out exactly what meddling the "partners" have done on their own. It sounds like alot of these issues are originating from internal conflicts as much as from a vendor lawsuit or accountant error, and it needs to be clear who has/had the authority to do what. I get the feeling she's too emotional about this to accurately determine this herself.

Daisysuzy said:   All paperwork was sent to old address the first paperwork I saw was the paperwork he faxed me....... My mom n law gets paperwork sent to her......: she hid it for months & she tried to make a huge payment !!!Stuff like this - did she do it on her own intiative, or was she acting as an officer of the corporation and just didnt bother to tell you? There's a big difference between stuff she had no authority to handle, and stuff she just handled badly.

Skipping 19 Messages...
Daisysuzy said:   You are right in saying something clearly went wrong and I am suffering the consequences. I will hopefully have it resolved through filing personal and business bankruptcy. Absolutely a horrible experience. Funny is the way you wrote it is pretty much how it all happened. The judgement is on all four of us. Anyway thanks for your help. I actually did get quite a few very helpful informative things I will be definitely be utilizing.I don't have much to add except best of luck getting the matter resolved, and please tell us what the outcome is.



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