Why is my corporation or LLC suspended?

 In Blog, Business Law

If you have a corporation or a limited liability company (LLC) registered with the California Secretary of State (SOS), you can check its current status on the SOS website. In the “Status” column, you might find that it has been suspended. There are 2 common reasons for this, discussed below.

Failure to file Statement of Information

Corporations and LLCs are both required to file a Statement of Information (SOI) with the SOS on a regular basis (either every year or every two years). The SOI contains basic details about the business entity, including name and address information for the entity, officers, members, and directors. If there has been no change from the previous filing, you can complete the “No Change Statement,” which simplifies the process. There is a $25 fee. For most business entities, you can complete this filing online.

If you fail to file this, you may incur a penalty from the SOS, and your entity be suspended. To rectify the situation, you need to contact the SOS as soon as possible, pay the amount due, and your entity should be returned to active status.

Failure to pay Franchise Tax Board minimum tax

Business entities in California are subject to a yearly minimum Franchise Tax Board (FTB) payment of $800. If this fee is not paid, the entity may be suspended.

If you have a corporation or LLC in California, you need to keep up with all required duties, including fees, filings, and corporate formalities. Failure to do so could result in fines, suspension, or even cancellation of your entity, preventing you from doing business in the name of the company. Even worse, failure to keep up with entity requirements could result in loss of the limited liability protections afforded by business entities. If you are in doubt, please contact a business attorney to review your company’s records and help you get your business entity in order.

Helix Law Firm can help with business law

If you need help with your business entity, Helix can help. We will look at your corporate records to see if anything is out of date and make sure you get everything updated. We can file your Statement of Information, draft your annual minutes, and do any other necessary work to bring your business entity into compliance.

If you’re interested in learning more, please call us at (619) 567-4447 to schedule a free consultation.

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