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How To Revive Suspended Corporation in California

Yesterday’s post concerned the circumstances that will cause the California Franchise Tax Board to suspend a corporation’s rights, powers, and privileges to conduct business in California.  Suspension, however, is reversible, although it isn’t necessarily easy.  First, is the matter of delinquent returns.  The Franchise Tax Board requires that all delinquent tax returns be filed.  Second, all delinquent tax balances, including penalties, fees, and interest must be paid.  Third, the corporation must be in good standing with the California Secretary of State.  Finally, an Application for Certificate of Revivor must be filed.  The application itself is probably the easiest item to complete.  It may be submitted by “by any stockholder or creditor, by a majority of the surviving trustees or directors thereof, by an officer, or by any other person who has interest in the relief from suspension or forfeiture”.  Cal. Rev. & Tax. Code § 23305.

Often people are in a hurry to obtain a revival because they are in escrow or in litigation and suddenly someone is making an issue of the corporation’s status.  The good news is that the Franchise Tax Board does permit “walk through” revivals.  However, the corporation must be in escrow or litigation or have pending loans or a pending federal grant.

When reviving a corporation from Franchise Tax Board, it is advisable to consider seeking relief from the voidability of contracts pursuant to Section 23305.1 of the Revenue & Taxation Code.  That, however, is a topic for another post.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume VI, Number 133
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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
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