If you get a notice that your corporation or Limited Liability Company (LLC) in California is suspended, you may be feeling somewhat panicked. Don’t worry, it’s usually fixable, although it may cost you quite a bit of money.

Why is my California entity suspended?

Suspensions of corporations and LLCs in California can occur due to the failure to file necessary documents or pay required fees, such as the annual Statement of Information or business taxes.

What does it mean if my California entity is suspended?

When a corporation or LLC is suspended, it loses its legal rights, powers, and privileges, including the ability to sue or defend against lawsuits, conduct business, and enter into contracts.

How do I fix my suspended entity?

Here are the steps to address a suspended corporation or LLC in California:

1. Identify the Reason for Suspension

The first step is to identify why your corporation or LLC was suspended. There are two main reasons:

• Franchise Tax Board (FTB) Suspension: Failure to pay taxes, penalties, interest, or not filing a tax return.
• Secretary of State (SOS) Suspension: Failure to file the required Statement of Information or other required documents.

You can find the reason by checking the status of your corporation or LLC on the California Secretary of State’s website or contacting the Franchise Tax Board.

2. Resolve the Underlying Issues

For FTB Suspensions:

• Pay Outstanding Taxes and Penalties: Ensure all outstanding taxes, penalties, and interest are paid to the FTB.
• File Delinquent Tax Returns: Submit any overdue tax returns to the FTB. This may include corporate income tax returns or LLC tax returns.
• Contact FTB: If there are any disputes or if you need clarification, contact the FTB directly to resolve these issues.

For SOS Suspensions:

• File Required Documents: File the necessary Statement of Information or any other required documents with the Secretary of State.
• Pay Filing Fees: Pay any outstanding filing fees associated with the required documents.

3. Revive the Entity

Once all underlying issues are resolved, you need to make sure the entity is revived. For SOS suspensions, once the Statement of Information is filed and processed, the SOS should revive the entity thereafter, but you may need to follow up with them.

For the FTB, you must file a Certificate of Revivor to reinstate your corporation or LLC. For FTB Revivor, complete and submit Form 3557 (Application for Certificate of Revivor) to the FTB.

4. Resume Business Activities and Maintain Compliance

Once the suspension is lifted and your corporation or LLC is reinstated, you can resume normal business activities. Moving forward, ensure that you maintain compliance! Regularly file required documents and pay taxes on time to prevent future suspensions.

Related

Guide to Laws for Entrepreneurs and Business Owners in California

Guide to California Corporations

Guide to California LLCs