Do you have a suspended California LLC?
A California LLC loses all of its legal rights when it is suspended. Theoretically, this means that your company must shut down completely and cease all business activity. Whenever this happens, your suspended California LLC must be revived before it can lawfully do business again.
Reasons for a Suspended California LLC
When you register an LLC with the California Secretary of State (SOS), you are allocated an identification number and are required to file a Statement of Information (Form: LLC-12) along with a $20 dollar filing fee every two years. In addition, you must keep your Statement of Information up to date with any changes in your registered agent, managers, primary business address, etc.
Furthermore, your LLC must file a state tax return with the Franchise Tax Board (FTB) every year (even if it did not conduct any business that particular year). If you fail to comply with either of these requirements, your LLC may be suspended by either the Secretary of State or the FTB.
Note: It currently takes the California Secretary of State as long as 4 months to process a Statement of Information that is sent in by mail, and during this processing period, your the LLC can still be suspended by the Franchise Tax Board.
The Consequences of Having Your California LLC Suspended
Failure to file your Statement of Information along with the $20 filing fee on time, or failure to amend your Statement of information (when necessary) may result in:
- Suspension of your California LLC by the Secretary of State
- A $250 late fee imposed by the FTB
- Additional penalties and monthly interest up to $696 (if your Statement of Information remains outstanding)
Your California LLC may be suspended by the Franchise Tax Board if you neglect to do any of the following:
- Pay the $800 minimum annual franchise tax.
- Pay any taxes due, such as tax on gross revenue.
- File a state tax return, even if your LLC has not contracted any business in that particular year.
- File an outstanding Statement of Information with the Secretary of State
Reviving Your Suspended California LLC
As stated above, if you have a suspended California LLC for any reason, it must first be revived before you can legally continue to do business. But, in order to do this you will first need to contact the Secretary of State to determine the following:
- Why Your LLC was suspended
- When it was suspended
- What precisely needs to be done to revive it, including all outstanding, taxes, penalties and interest
If your LLC was suspended by the Secretary of State because you haven’t filed or updated your Statement of Information, it may be revived by mailing a letter to the Secretary of State along with the past due Statement of Information and any filing fees, penalties, and interest owed.
What is Revivor?
After your Statement of Information has been filed and the past due fees and penalties have been paid, and providedthat your LLC’s name has not taken by another California business entity while it was suspended, your LLC will receive a “Notice of Revivor” from the Secretary of State and the Franchise Tax Board will be notified.
If your LLC was suspended by the FTB, before it can be revived, you will need to file all past due tax returns and statements, and pay all outstanding fees, taxes, penalties and interest, and file an application for a “Certificate of Revivor“ with the FTB.
However, because it may have been taken or reserved by another California business entity during the time your LLC was suspended, your LLC’s name must be approved again by the Secretary of State before the FTB it can issue you a certificate of revivor.
Once your application for a certificate of revivor is accepted, the FTB will notify the Secretary of State and your LLC’s rights and privileges will be reinstated and you will be able to lawfully engage business again.
How Long Will It Take The State To Revive Your California LLC?
The time it takes for the state to revive your California LLC can vary, but is typically more than 8 weeks. The current processing time can be found on the Secretary of State’s website.
If you want to expedite the process, you can pay an additional fee to have your processing completed the same day or within 24 hours. For more information on reviving your California LLC contact a qualified California business law attorney who can assist you in meeting all of your business needs.
