Suspended or Forfeited? Revive Your California Business Entity
Complete guide to understanding FTB suspension, reinstating your corporation or LLC, resolving back taxes, and maintaining compliance to prevent future suspension.
Consequences of Operating While Suspended
A suspended entity cannot legally conduct business in California. Operating while suspended creates serious legal and financial risks:
- No court access: Cannot file lawsuits, defend lawsuits, or enforce contracts in California courts
- No state filings: Cannot file amendments, name changes, or any documents with Secretary of State
- Voidable contracts: Contracts signed while suspended may be voidable by the other party
- Personal liability: Officers/members may be personally liable for entity debts incurred while suspended
- License revocation: Professional licenses, permits, and registrations may be suspended or revoked
Why Entities Get Suspended or Forfeited
California suspends thousands of corporations and LLCs each year. Understanding why helps you navigate the revival process and prevent future issues.
The Franchise Tax Board suspends entities for tax-related failures:
- Failure to pay annual franchise tax ($800 minimum)
- Failure to file required tax returns
- Outstanding tax liabilities or assessments
- First-year exemption followed by non-payment
The Secretary of State forfeits entities for filing failures:
- Failure to file Statement of Information
- Failure to designate agent for service of process
- Agent resignation without replacement
- Corporate powers suspended by court order
To maintain "Active" status, entities must:
- Pay all franchise taxes when due
- File annual/biennial Statement of Information
- Maintain valid registered agent
- File all required tax returns
Check Your Entity Status
Search the California Secretary of State business database to check your entity's current status. Look for "Active," "Suspended," "Forfeited," or "FTB Suspended."
Dual Suspension Possible
An entity can be suspended by BOTH the FTB and Secretary of State simultaneously. Revival requires satisfying both agencies' requirements before status is restored.
Step-by-Step: How to Revive a Suspended Entity
Revival typically takes 30-60 days and requires satisfying all outstanding obligations to both the FTB and Secretary of State.
Determine Reason for Suspension
Check both the FTB and Secretary of State to identify all reasons for suspension. You must address ALL issues for revival.
SOS Check: Search bizfileonline.sos.ca.gov
File All Delinquent Tax Returns
File all missing franchise tax returns (Form 100, 100S, or 568 for LLCs). Even if no income, returns must be filed.
LLCs: Form 568 (LLC Return of Income)
Note: Include all years from formation through current
Pay All Outstanding Taxes, Penalties, and Interest
Calculate and pay all franchise taxes owed, plus penalties and interest. The FTB can provide a payoff amount.
Penalty: 5% per month up to 25% for late filing; $250 revival penalty per year
Interest: Currently ~7% annually on unpaid amounts
File Delinquent Statements of Information
File all missing Statements of Information with the Secretary of State. Corporations file annually; LLCs file biennially.
Corporations: Due within 90 days of anniversary, then annually
LLCs: Due within 90 days of formation, then every 2 years
Request Certificate of Revivor
Once all taxes are paid, the FTB issues a Certificate of Revivor to the Secretary of State. This can take 30-60 days.
Expedite: Not available for revivals
Verification: Check SOS website for status update
Confirm Active Status
Verify your entity shows "Active" status on both the FTB and Secretary of State databases. Obtain good standing certificate if needed.
Status Letter (FTB): Available online at ftb.ca.gov
California Franchise Tax: What You Owe
California imposes an annual franchise tax on all corporations and LLCs doing business in the state, regardless of income.
| Entity Type | Minimum Tax | Due Date | Notes |
|---|---|---|---|
| C-Corporation | $800 | 15th day of 4th month | Or 8.84% of CA net income, whichever is greater |
| S-Corporation | $800 | 15th day of 4th month | Or 1.5% of CA net income, minimum $800 |
| LLC (taxed as partnership) | $800 | 15th day of 4th month | Plus LLC fee based on total income (see below) |
| LLC Fee (if income $250K+) | $900-$11,790 | 15th day of 6th month | Based on total California income brackets |
| Limited Partnership | $800 | 15th day of 4th month | Minimum annual tax |
First-Year Exemption
New corporations and LLCs formed on or after January 1, 2024 are exempt from the $800 minimum franchise tax for their first taxable year. The tax IS due in Year 2 and beyond.
LLC Fee Schedule (2024)
$250K-$499K: $900
$500K-$999K: $2,500
$1M-$4.99M: $6,000
$5M+: $11,790
Estimated Tax Requirement
If you expect to owe more than $800 in tax, you must make quarterly estimated tax payments. Failure to pay estimated tax results in penalties.
Statement of Information Filing Requirements
The Statement of Information (SOI) tells the Secretary of State who runs your entity and where to find them. Missing SOI filings lead to forfeiture.
What's Included in the SOI
Corporations: Officers (CEO, CFO, Secretary), directors, agent for service of process, principal address
LLCs: Managers/members, agent for service of process, principal and mailing addresses
Agent for Service of Process
Every entity must designate an agent who can receive legal documents. Can be an individual (CA resident) or registered corporate agent. Agent resignation without replacement leads to forfeiture.
Tax Clearance Certificates
Certain corporate transactions require proof that all California taxes have been paid. The FTB issues Tax Clearance Certificates for these purposes.
When Tax Clearance is Required
Dissolution: Before filing Certificate of Dissolution with SOS
Merger: For the disappearing entity
Withdrawal: Foreign entity leaving California
Conversion: Entity type changes in some cases
How to Request
File FTB Form 3555 (Request for Tax Clearance Certificate). The FTB reviews all tax years and outstanding liabilities before issuing. Processing takes 30-60 days.
No Tax Clearance if Suspended
You cannot obtain a Tax Clearance Certificate while suspended. You must first revive the entity, then apply for tax clearance, then proceed with dissolution/merger.
Final Tax Returns Required
Before tax clearance is issued, you must file all outstanding returns including final short-year returns. Final returns must be marked "FINAL" and show zero activity after dissolution date.
Prevent Future Suspension: Compliance Checklist
Once revived, staying in good standing requires consistent attention to filing and payment deadlines.
Annual Compliance Checklist
Pay Franchise Tax by 15th of 4th Month
For calendar year entities, this is April 15. Mark your calendar and pay early to avoid penalties.
File Annual Tax Return
Form 100/100S for corporations, Form 568 for LLCs. Due by 15th of 4th month (3rd month for S-Corps).
File Statement of Information
Corporations: annually during anniversary month. LLCs: biennially during anniversary month. $25 fee.
Maintain Registered Agent
Ensure your agent for service of process is current. If using a commercial agent, renew their services annually.
Pay Estimated Taxes (if applicable)
Quarterly estimated payments due if expecting tax liability over $800. Due 15th of 4th, 6th, 9th, and 12th months.
Update Business Address
File updated SOI within 60 days of any address change. Ensure you receive FTB and SOS correspondence.
Set Calendar Reminders
Create recurring calendar reminders 30 days before each deadline. Most suspensions happen due to simple oversight, not intentional non-compliance.
Consider a Registered Agent Service
Commercial registered agents handle Statement of Information filings and provide compliance reminders. Worth the $50-$300/year for peace of mind.
Frequently Asked Questions
Typically 30-60 days from when all taxes are paid and returns are filed. The FTB must process your payment and issue a Certificate of Revivor to the Secretary of State. There's no way to expedite this process. Plan accordingly if you need revival for a specific deadline (e.g., contract signing, litigation, sale).
You can, but the entity continues to exist in suspended status. California will continue accruing franchise taxes ($800/year) even while suspended. To properly end the entity, you must revive it, obtain tax clearance, and file dissolution documents. Otherwise, the tax debt keeps growing.
The FTB offers payment plans for taxpayers who can't pay in full. You can request an installment agreement, though this may not result in immediate revival. The entity typically remains suspended until the full balance is paid. Contact the FTB to discuss options at (916) 845-4171.
Suspension itself doesn't directly affect personal credit. However, the FTB can pursue collection actions against the entity, and in some cases, assess responsible person liability against officers. Additionally, contracts entered while suspended may expose officers to personal liability if the other party rescinds.
Yes. The $800 minimum franchise tax is owed by all California corporations and LLCs regardless of income, profit, or activity level. Even dormant entities with zero revenue owe $800 per year. The only exception is the first-year exemption for new entities (formed after January 1, 2024).
No. A suspended entity cannot maintain, defend, or prosecute any lawsuit in California courts. Contracts signed while suspended are voidable at the other party's option. The entity also cannot file any documents with the Secretary of State until revived.
Need Help Reviving Your Entity?
Navigating FTB requirements and back taxes can be complex. Let us help you get back to good standing quickly and correctly.
Schedule Revival Consultation