Hi~We have small S Corp. Plumbing Co. in MI. There are two shareholders-myself & my husband. We did mostly new residential construction plumbing. We are owed quite a bit of money from various builders,but it is highly unlikely that we will see any of that. Michigan's housing market, new construction especially, is at a standstill.
Construction Liens have been placed on the properties however, a lien doesn't do much good when the house sits unsold. Starting cost to hire a lawyer & force foreclosure on lien is approx $1000 (money we don't have) Even if you're successful on the foreclosure, the home still needs to be sold in order to collect.
Other than the money that is owed to us, the company itself has no 'physical' assets other than some tools. Our one van is in our personal name. We owe our suppliers quite a bit of money, since we've not gotten paid, they've not been paid.
If we close the business, what will happen to those debts? We do not have personal guarantees with the suppliers & the accounts with them are in the corp. name.
Looking over the paperwork required to officially dissolve a corp in Mi it states that the business has no outstanding debts nor any assets. Since that's not the case here, I'm assuming I would not be able to just fill out some papers & that be the end of it. Would I have to actually file a bankruptcy for the corp? What if I didn't? What would happen if we just simply closed down and walked away?
My thought is the suppliers would most likelyattempt some sort of legal action, but if there's nothing for them to take and there's no money in the company, what could they really do?
Thank you in advance