Dissolved/De facto Corporations - Issue 1

"The Tax Commission may certify and transmit to the Department of State a list of any stock corporations and corporations formed for profit, with a few exceptions, that have not filed required tax reports for the two previous years or who are delinquent in the payment of taxes for any two years. The Secretary of State must then makme a proclamation declaring the corporations dissolved and their charters forfeited. NY Tax §203-a

The same is true for annulment of authority of a foreign corporation to do business. NY Tax §203-b"

"are deemed to be ""de facto"" corporations and are estopped from pleading dissolution to avoid contractual obligations if the corporation fails to cease its business activities and continues to hold itself out of the public as an ongoing corporate enterprise, exercising the powers and functions of a corporation, but without the lawful authority to do so. H.E.G. Development & Mgt. Corp. v. Blumberg, 171 Misc.2d 740, 656 N.Y.S.2d 127, 128 (N.Y. Sup. 1997)(""A corporation is a legal entity created by the state and may be dissolved by the state, under Tax Law § 203-a(3) and § 217, and yet continue to act as a de facto corporation.""); D&W Central Station Alarm Co. v. Copymasters, Inc., 122 Misc.2d 453, 471 N.Y.S.2d 464 (N.Y. City Civ. Ct. Queens Cty. 1983)(de facto corporation estopped from pleading dissolution to avoid its obligations since it continued its operations, operated its premises and held itself out as a corporation, notwithstanding its alleged dissolution). See also Ludlum Corp. Pension Plan Trust v. Matty's Superservice, Inc., 156 A.D.2d 339, 548 N.Y.S.2d 292 (2d Dep't 1989)(where dissolved corporation carried on as if incorporated and procured loan which it then defaulted in repaying, it was deemed to be a de facto corporation and could not avoid its obligations under the loan in an action to foreclose on mortgage given as security for the defaulted loan)."