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Suspended Corporations and LLCs Lose the Right to Conduct Business in California

Jonas M. Grant was recently quoted as a California corporate law subject matter expert in an article in an online journal covering Los Angeles real estate news:

[The] corporation ... continues to conduct business even though the state of California suspended its registration over two months ago. Operating without a valid registration is illegal under California law, legal experts said. ...

Jonas Grant, an L.A.-based attorney who practices corporate entities law, said as a business without a valid corporation registration, ?you?re basically dead in the water until you fix the problem.? ...

Suspension temporarily strips corporations of a number of rights ... including being able to defend itself in court or bring a lawsuit. Such corporations could also have contracts voided by a court, according to California law.

?If you don?t have the right to conduct business that would include the right to contract,? said Grant.

Inside Mercer Vine: A suspended brokerage, a potential fraudster at the helm, and $260M in dead deals by Natalie Hoberman and Will Parker, The Real Deal, December 1, 2017.

A suspended corporation cannot conduct any business in the State of California until it is revived to active, good standing, a process called revivor. This is generally accomplished by filing any past due annual reports or tax returns, and by paying any past due taxes, interest, and penalties with the Franchise Tax Board.

Recommended steps to avoid a suspension include engaging an accountant to assist with tax preparation and filing and to keep track of associated deadlines, and enrolling the LLC or corporation in a lawyer's corporate maintenance program to ensure legal compliance.

Full post as published by California Business Law Blog on December 02, 2017 (boomark / email).