by John J. Tollefsen | May 25, 2009 | Blog, Business Law, Entity
Cancelled LLC cannot sue or be sued but members could have liability Chadwick Farms Owners Ass’n v. FHC LLC, 207 P.3d 1251, 2009 WL 1333004 (Wash. May 14, 2009) (NO. 80450-8, 80459-1) These consolidated cases involve the capacity of limited liability companies to sue and be sued after their certificates of formation are canceled pursuant to provisions in the Washington Limited Liability Company Act, RCW chapter 25.15 (the Act). Under the plain terms of the Act, a limited liability company ceases to exist as a legal entity and cannot be sued once its certificate of formation is canceled. At the same time, it cannot sue other entities once it is canceled. RCW 25.15.303, enacted after the actions in the present cases were brought, does not change this result. This statute provides that dissolution does not affect any remedy available and it establishes a statute of limitations for suits against limited liability companies that runs from the date of dissolution. The statute does not authorize suits after cancellation, either against or by the limited liability company. The Supreme Court reversed the Court of Appeals’ decisions in these cases and held that the defendant limited liability companies were not subject to suit once they were canceled. By its plain language, RCW 25.15.303 provides that (1) dissolution does not affect any claim against a limited liability company and (2) there is a three-year limitations period from the date of dissolution in which to commence suit against a limited liability company. The statute never mentions “cancellation.” RCW 25.15.295(2) unambiguously states that after a limited liability company is dissolved and before cancellation, i.e., during...
