/>iCalifornia's Revised Uniform Limited Liability Company Act endows limited liability companies with a certain level immortality. Corporations Code Section 17707.06(a) provides:
"A limited liability company that has filed a certificate of cancellation nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it in order to collect and discharge obligations, disposing of and conveying its property, and collecting and dividing its assets. A limited liability company shall not continue business except so far as necessary for its winding up."
The fact that the RULCCA imposes no time limit on suing LLCs does not mean that there are no time limits. The statute of limitations applicable to the cause of action determines whether a lawsuit has been timely filed.
In a recent unpublished opinion, the individual defendant was sued as alleged the alter ego of a dissolved LLC for breaches of numerous promissory notes. Milks v. Affirmed Techs., LLC, 2024 WL 1502944 (Cal. Ct. App. Apr. 5, 2024), reh'g denied (Apr. 30, 2024). He demurred on the basis that the causes of action were untimely. The wrinkle in the case is that the LLC was formed under Nevada law and NRS 86.505(1) provides:
"The dissolution of a limited-liability company does not impair any remedy or cause of action available to or against it or its managers or members commenced, within 2 years after the effective date of the articles of dissolution, with respect to any remedy or cause of action as to which the plaintiff learns, or in the exercise of reasonable diligence should have learned of, the underlying facts on or before the date of dissolution, or within 3 years after the date of dissolution with respect to any other remedy or cause of action. Any such remedy or cause of action not commenced within the applicable period is barred. A dissolved company continues as a company for the purpose of prosecuting and defending suits, actions, proceedings and claims of any kind or nature by or against it and of enabling it gradually to settle and close its business, to collect and discharge its obligations, to dispose of and convey its property, and to distribute its assets, but not for the purpose of continuing the business for which it was established."
The plaintiff tried to circumvent this limitation by arguing that California law should govern because the notes provided for the application of California law. The Court of Appeal disagreed: "A statute of limitations defines the time within which a particular cause of action may be brought, while a survival statute defines the time within which certain defendants may be sued." (emphasis in original).
Note that the opinion was not certified for publication. California Rules of Court, Rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b).
