Many times, a debtor will be identified as the “XYZ Company.” Without further information, the creditor cannot know whether the entity which owes the debt is a corporation, sole proprietorship, partnership, or limited liability company.
It is necessary when considering suing a debtor that the proper legal entity be identified. In the case of a corporation, the name must include either “Inc.,” “Corp.,” or “Ltd.” A limited liability company must include “LLC.” A partnership or sole proprietorship can be identified from a business certificate filed in the County Clerk’s Office. Other forms of legal entities include limited partnerships, professional corporations, and professional limited liability companies.
The necessity of suing the proper party is to ensure that when it comes time to enforce the prospective Judgment, the debtor will be properly identified and the debtor’s assets will be leviable. Further, it will help eliminate defenses concerning the jurisdiction of the court over the proper party.
To assist in collection against the proper entity, the creditor should obtain the exact name of the debtor and its type of organization at the onset of the transaction. A search through the records of the Secretary of State’s Office can verify the information provided by the debtor. The creditor may also request that the debtor provide a copy of the Certificate of Incorporation or Business Certificate of the entity. In fact, this is a common requirement of a bank when a debtor opens a bank account.
by Richard A. Klass, Esq.
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copyr. 2014 Richard A. Klass, Esq.
The firm’s website:
www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.
R. A. Klass
Your Court Street Lawyer
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