What happens to a lawsuit that was already underway when a corporation gets dissolved?
A lawsuit involving a corporation as either plaintiff or defendant generally can't properly continue once that corporation has been dissolved, because a dissolved corporation no longer exists as a legal person capable of suing or being sued. This can happen unexpectedly, particularly where a corporation is administratively dissolved partway through litigation for an unrelated compliance reason, like a missed filing, rather than because of the lawsuit itself.
The standard fix under the Business Corporations Act is to apply to revive the corporation, which restores its existence, generally treated for most purposes as if the dissolution hadn't interrupted things, so the litigation can carry on. Courts are generally familiar with this situation and revival for exactly this purpose is common, but it does add a procedural step, and potentially cost and delay, to litigation that would otherwise simply proceed on its existing schedule.
If you're involved in litigation and you learn the corporation on the other side, or your own corporation, has been dissolved, don't assume the case just disappears. Confirm the corporation's current status and look into revival promptly so the litigation isn't left in limbo longer than necessary.
Key takeaways
- A dissolved corporation generally can't sue or be sued until it's revived.
- Revival restores the corporation's existence so pending litigation can properly continue.
- This often arises from an unrelated administrative dissolution, not the lawsuit itself.
- Confirm a party's corporate status promptly if dissolution is discovered mid-litigation.