Revival corrects the deletion – Company law / commercial law

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United States: Revival corrects the deletion

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California is pressuring companies to pay their taxes by suspending their powers, rights and privileges when they don’t. Cal. Rev. & Tax Code § 23301. Therefore, a suspended company cannot plead. Welco Constr., Inc. v. Modulux, Inc., 47 Cal. App. 3d 69, 71, 120 Cal. Rptr. 572 (1975).

Suspension, however, is not the last word as a company can pay its taxes and then apply for reinstatement with the Franchise Tax Board. Cal. Rev. & Tax Code § 23305. Assuming that the company meets the applicable legal requirements, the Franchise Tax Board issues a “certificate of reactivation”. Identifier. “As soon as the certificate is issued [of revivor] by the Franchise Tax Board, the taxpayer named therein will be reinstated, but the reinstatement will be without prejudice to any action, defense or right resulting from the initial suspension or forfeiture. . . . “Cal. Rev. & Tax Code § 23305a.

What happens when a suspended company files a notice of revocation and is subsequently revised? According to the United States District Court judge John a houston, the answer depends on whether the action is considered substantial or procedural. Jimenez v. CRC Prop. Mgmt. West Inc., 2021 US Dist. LEXIS 177618 Substantial actions are not validated by the alarm clock whereas procedural actions are. The filing of a deregistration notice falls under the procedural category and is therefore validated by the subsequent reconstitution of a suspended company.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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