Keeping Up Yearly Corporate Filings
California law requires corporations, limited liability companies and common interest development associations to update the records of the California Secretary of State on an annual or biennial basis by filing a statement of information. Keeping up with these yearly corporate filings is necessary in order to maintain good corporate standing and avoid penalties and fees.
If you do not file an annual statement of information and pay the accompanying nominal fee, the Secretary of State can fine your corporation $250. If you continue to not file the statement, your corporation can be suspended.
If your corporation is suspended, it will lose the protections and benefits of a properly maintained corporation, including the right and ability to:
- exercise its power, privileges and rights;
- bring a lawsuit;
- defend itself against a lawsuit;
- file a notice of appeal; and
- engage in any type of real estate transaction.
If your corporation is suspended it could also lose its corporate name, which would allow another properly formed and maintained California corporation to take the name.
To avoid suspension, corporations are advised to do everything possible to maintain the responsibilities associated with a corporation. This includes paying corporate taxes every year, filing a tax return, submitting an annual statement of information, and holding annual shareholder meetings.
However, even if your corporation has been suspended, it can be reinstated. This process may be costly, particularly if there are many delinquent fines and reinstatement fees. Also, if your corporate name was taken by someone else during suspension you will not be able to get it back. Upon applying for reinstatement and meeting all corporate requirements, most corporate powers will be restored.
Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.