Legal Definitions - nul tiel corporation

Nul tiel corporation is a legal defense used in a lawsuit to assert that a party claiming to be a corporation, or being sued as one, does not, in fact, legally exist as a corporation. When this defense is successfully raised, the party alleging corporate status must then provide proof of that entity's legal formation and existence.

Here are some examples to illustrate this concept:

• Imagine a situation where a company, "Innovative Solutions Inc.", files a lawsuit against a client for unpaid invoices. The client's legal team conducts a thorough investigation and discovers that "Innovative Solutions Inc." was never formally registered as a corporation with the state's Secretary of State office. In this scenario, the client's lawyers could raise the nul tiel corporation defense, arguing that the plaintiff, as a non-existent corporation, lacks the legal standing to sue. This would then require "Innovative Solutions Inc." to prove its corporate existence before the case could proceed on its merits.

• Consider a scenario where a small business owner, Ms. Rodriguez, enters into a contract to supply goods to an entity calling itself "Global Distribution Corp.". When "Global Distribution Corp." breaches the contract, Ms. Rodriguez attempts to sue them. However, her attorney's research reveals that "Global Distribution Corp." was never properly incorporated and operates solely as a trade name used by an individual, Mr. Thompson. If Ms. Rodriguez sues "Global Distribution Corp." as a corporate entity, Mr. Thompson could raise the nul tiel corporation defense, asserting that the named defendant does not exist as a legal corporation. This would force Ms. Rodriguez to amend her lawsuit to sue Mr. Thompson personally, rather than a non-existent corporation.

• Suppose a group of investors believes they were defrauded by a company named "Future Ventures Group Inc." and decides to file a class-action lawsuit. During the initial stages of the litigation, the defendant's legal team investigates the plaintiff group and finds that the lead plaintiff, "United Investors Alliance Inc.", which claims to represent the group, was dissolved by the state several years prior for failing to file required annual reports. The defendant's attorneys could then file a motion asserting a nul tiel corporation defense against "United Investors Alliance Inc.", challenging its legal capacity to act as a plaintiff in the lawsuit. This would require "United Investors Alliance Inc." to demonstrate its current corporate standing or for the plaintiff group to find a different, legally existing entity or individual to serve as the lead plaintiff.