Request a Same Day Telephone Consultation. Marsh's Reviver Phase 1 Intake Sheet. When a California corporation is suspended, the corporation has lost all of its rights and privileges and cannot legally operate. Technically, the corporation is required to close its doors, and to stop all business related activity.
Recently we have seen many commercial banks suspend credit lines and close the bank accounts of suspended California corporations and LLCs. A suspended California corporation cannot sue, or defend, any action in court. In addition, a suspended California corporation that provides a service, or goods, to third parties while suspended is prohibited from collecting payment for such services and goods since the suspended California corporation technically was not permitted to engage in any business transactions.
For a suspended California corporation to once again achieve good standing, the California corporation must be revived, or reinstated. If you would like Ms. Just complete Ms. Marsh receives confirmation of your payment she will contact you at the telephone number you provide for any additional information needed. Every corporation formed in California is registered with the California Secretary of State's office, assigned a corporate identification number, and is required to file an annual Statement.
The Secretary of State will suspend a California corporation if the corporation fails to timely file the required annual Statement. Why and by whom a California corporation has been suspended is important because one suspension can trigger another and certain rights can be lost if the corporation is not properly revived. For example, you only have one shot at contract voidability which may be very important if you are trying to enforce or defend a contract executed while the corporation was suspended.
Whichever agency suspends the corporation will mail the California corporation a suspension notice, at which time the corporation is thereafter disqualified from exercising its corporate powers, rights and privileges.
In other words, the California corporation cannot legally operate. Recently we have seen many commercial banks freeze credit lines and close the bank accounts of California corporations and LLCs that are suspended.
Until the California corporation corrects its suspended status, the corporation will be prohibited from transacting business, filing a lawsuit, answering a lawsuit filed against it, closing an escrow, initiating litigation, or protecting and preserving its name.
See, Timberline, Inc. Jaisinghani, 54 Cal. Any contract executed by a California suspended corporation is voidable at the demand of the other party. The only exceptions to the loss of corporate privileges upon suspension are that the corporation may 1 change its name which may be necessary to revive a suspended corporation , 2 file its annual statement and 3 apply to the Franchise Tax Board for tax-exempt status.
Nevertheless, a suspended California corporation is still required to pay all the applicable taxes and to file its state tax returns even if no money is earned. Suspension means the corporation loses its rights to its name. What happens if the suspended corporation gets a check? This requires,. Along with this certificate the corporation can also request relief from contract voidability. If your corporation was also suspended by the SOS, file the missing Statement of Information form and get a letter of proposed relief from suspension or forfeiture.
Paying all delinquent taxes, including penalties and interest. If your business cannot pay its taxes, the FTB may make you personally responsible if you. AB The administrative dissolution may be cancelled if the LLC or corporation objects and takes all the steps necessary to revive the company.
However, for those business owners who are concerned about the state somehow catching up with them and personally assessing them for their business's back taxes, the law provides some assurance that, provided they ceased doing business but had filed all required returns and paid all required taxes for the years during which they did business, the owners may avoid any personal liability.
Spiller Law can help. If your business has been suspended, a lawyer can help you revive it and bring it back into good standing. In many instances, a lawyer can negotiate a reduction in the costs and penalties you are facing. Spiller Law offers such services and would be happy to help you. As noted above, this could be something as simple as a failure to file a Statement of Information with the California Secretary of State.
As a quick primer, a Statement of Information is an informational document that must be filed with the California Secretary of State within 90 days of registering the business entity in California and then every year if a corporation or every two years if an LLC thereafter. A Statement of Information is a relatively simple document that lists certain key information about the business entity, i.
This might include establishing a game plan by figuring out why the suspended status occurred, how it can be fixed e. Long story short, if Mr. The alternative could be disastrous.
If you seek legal assistance as it relates to the maintenance of your California business entity, please feel to call us.
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