D & W Central Alarm Co. v. Copy Masters, Inc

In D & W Central Alarm Co. v. Copy Masters, Inc., 122 Misc 2d 453 (Civ.Ct. Queens Co. 1983) the defendant was dissolved by proclamation for failure to pay franchise taxes; however, business continued as usual since apparently no one was aware of the lapse in corporate status. Id. at 454. Eventually realizing the dissolution, the defendants filed a new certificate of incorporation rather than paying the franchise taxes due and owing to the state. Id. The defendants then tried to assert the nonexistence of the corporation as grounds to dismiss the suit of a creditor against them. Id. at 453. They argued that the obligations of the first entity did not carry over to the newly incorporated entity, even though it shared the same name, officers, business, location, etc. Id. Rejecting this argument, the court noted that allowing a dissolved corporation to avoid its obligations this way essentially created a loophole for the delinquent corporation to benefit from its wrongdoing--intentional or otherwise. Id. at 457.