If comapny does not pay you for invoice you sent for more than 4 months, what legal action you can take?

I have a C Corporation for my Software Consulting business. I am the only one person in the Corp. I had worked at the client site through other Consulting company "X" on Corp to Corp basis. The Client had alredy paid all the money to this company "X" in full for my services but the comapny "X" has hardly paid me 20% of the money and they have been delaying the payment for the last 4 months. Everytime I call them they tell me that they running short of cash. What legal action I can take to get my money back and can I claim penalty?

Did you have a signed agreement/contract with X Corp? If not, there is nothing you can do even if they choose not to pay you. Take it as a lesson learned. However, if there was a written/signed agreement with X Corp, the law needs proof that you did invoiced them. If you haven't done that, I suggest you start right away. In the invoice you should indicate that payment needs to be received within 2 weeks from date of this invoice failing which an interest of XX% shall be charged until full settlement. If payment still not received in 2 weeks, send a 1st reminder giving them another 2 weeks. If 2 weeks have past since the 1st reminder, send a 2nd and final reminder that if payment still not received by XX date you shall proceed with legal procedure and all charges shall be debited to their account. Remember, you need proof too that the reminders were mailed. I suggest you register all reminders/communications and keep the receipts as proof.

If they are nearby, you can sue them in small claims court, if the amount is small enough. You can send it to collections but you will have to pay the collections agency. Sometimes an attorney letter will do the trick. Good luck!

1. I assume the subject party is under some type of contract. If it was verbal in nature, do you have any form written contract with him and did the verbal contract document rules about payment and consequences of nonpayment. A verbal contract followed by a simple written confirmation in this situtation would be very helpful

2. If it was written conditions, you need to review the terms and condition of the contract. Again, did you place any terms in the contract about the consequences of non-payment of services. Without any provisions, the subject party is still liable for payment but the odds of collection of a full award is smaller if you did.

3. For future advice, if most of your contracts are verbal in nature, then sending a written confirmation that document your understanding of terms and condition of the verbal agreement is the best way to handle. In addition, you need to have some binding guidelines which specify that both parties agree to (i) if payment for services rendered does not occur, then X action will occur and (ii) late payments after certain date will result in assessment of a interest rate for late payment that is reasonable to both parties.

you can contact a collections attorney. you can also report to dun & bradstreet.

Sounds like you took the position as a subcontractor which means if you don't get paid you can lein the customers property which would get you paid, however if the time expired for you to do this you may be SOL.