September 27, 2022

Volume XII, Number 270

Advertisement

September 26, 2022

Subscribe to Latest Legal News and Analysis

Corporate Suspension By California Secretary Of State

In California, a corporation may find its powers, rights and privileges suspended by either the Secretary of State or by the Franchise Tax Board.  Today’s post discusses the two roads to suspension by the California Secretary of State.

The most common cause for suspension is the failure to file the annual information statement required by Corporations Code Section 1502 even though a corporation must be exceedingly neglectful to find itself suspended.  Not only must the corporation have failed to file the annual statement, it must not have filed a statement in the preceding 24 months.  Cal. Corp. Code § 2205(a)  In addition, the Secretary of State must have certified the corporation for penalty pursuant to Corporations Code Section 2204(a).  Under Section 19141 of the Revenue and Taxation Code, the penalty is $250. When these conditions are all met, the Secretary of State is required to provide 60 days notice of the impending suspension.  Cal. Corp. Code § 2205(b).  If the corporation still doesn’t made things right, the Secretary of State is required to provide notice to the Franchise Tax Board and the corporation and the corporation’s powers, rights and privileges will thereupon be suspended, except for the purpose of filing an application for exempt status or amending the articles of incorporation as necessary either to perfect that application or for a new name.  Cal. Corp. Code § 2205(c).

The Secretary of State may also suspend a corporation for failing to reimburse the Secretary of State for an award made from the Victims of Corporate Fraud Compensation Fund.  Cal. Corp. Code § 2293.1.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume VI, Number 131
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

949-851-5428
Advertisement
Advertisement
Advertisement