Suspended LLC or Corporation in California: How to Revive It

Owners usually find out their company is suspended at the worst time: a title company flags it in escrow, a lender’s underwriter pulls the status, or opposing counsel raises it in a lawsuit. By then there are two problems: getting reinstated, and dealing with what the suspension did to contracts the company signed in the meantime. The short version of suspension and revivor is on my California LLC annual requirements page. Below is the longer one, for LLCs and corporations.

What does “suspended” mean for a California LLC or corporation?

It means the state has taken away the company’s powers, rights, and privileges. The company still exists on paper, but it can’t legally act. The Franchise Tax Board says a suspended or forfeited business isn’t in good standing and loses its rights, powers, and privileges to do business in California.

“Forfeited” is the same status for an out-of-state company registered here. The statutes suspend a domestic company’s powers and forfeit a foreign company’s right to exercise its powers in California (Rev. & Tax. Code § 23301).

FTB suspended vs. SOS suspended: what’s the difference?

Two agencies suspend for different reasons, and the fix is different for each. A company can be suspended by both at once, according to the FTB.

	Franchise Tax Board	Secretary of State
Trigger	Unpaid tax, penalty, or interest, or a return not filed	Missed Statement of Information, after a prior penalty and 24 months without a filing
Authority	Rev. & Tax. Code §§ 23301, 23301.5	Corp. Code § 17713.10 (LLCs), § 2205 (corporations)
Contracts voidable?	Yes	For a corporation suspended only by the SOS, no, per the FTB
How to cure	File returns, pay balances, file FTB 3557 for a certificate of revivor	File a current Statement of Information

Why the FTB suspends

For an unpaid balance, the FTB can suspend a company whose tax, penalty, or interest that was due with the return isn’t paid by 6 p.m. on the last day of the 12th month after the close of the tax year (Rev. & Tax. Code § 23301(a)). For a missing return, it can suspend a company that fails to file a required return (Rev. & Tax. Code § 23301.5). For LLCs, “tax” includes both the $800 annual tax and the LLC fee (Rev. & Tax. Code § 23305.5(b)(2)).

The FTB says entities registered with the Secretary of State must file and pay at least the $800 tax from their registration date to the present, regardless of activity. An LLC that sat unused for four years usually owes four years of returns and tax. My $800 LLC tax page explains why the tax runs until the company is canceled, and my LLC fee page covers the fee.

Why the Secretary of State suspends

For missed Statements of Information. An LLC that misses a filing period, hasn’t filed a statement in the preceding 24 months, and was already certified for the $250 penalty for that period is subject to suspension (Corp. Code § 17713.10(a)). The Secretary of State sends a 60-day warning first (Corp. Code § 17713.10(b)). My Statement of Information page covers the filing that prevents it.

What can’t a suspended LLC or corporation do?

Almost anything that matters. The FTB lists what a suspended business cannot do:

• Legally do business.
• Sell, transfer, or exchange real property.
• File with an automatic extension, or receive a refund.
• Start or continue a protest, or file or maintain an appeal before the Office of Tax Appeals.
• Legally close or dissolve.
• Bring an action or defend itself in court.
• Keep the right to use its business name.

The real property rule is in the statute. A suspended taxpayer isn’t entitled to sell, transfer, or exchange real property in California during the suspension (Rev. & Tax. Code § 23302(d)). A rental LLC that’s suspended can’t close a sale, and title companies check.

The name can be lost

Before issuing a certificate of revivor, the FTB must get the Secretary of State’s endorsement that the company’s name is still available (Rev. & Tax. Code § 23305a). If someone else took the name in the meantime, the Secretary of State says the company must change its name, get a release from whoever reserved it, or persuade the other business to change.

Penalties that keep running

A suspended company that doesn’t file a return within 60 days after the FTB’s written demand faces a $2,000 penalty for each taxable year (Rev. & Tax. Code § 19135(a)). For a corporation, anyone who attempts to exercise the powers of a suspended corporation can be fined $250 to $1,000 or jailed up to a year (Rev. & Tax. Code § 19719(a)).

The FTB also says it may hold owners personally responsible for taxes a business can’t pay if they took assets out of the business, have unpaid shareholder loans, or paid officers excessive salaries. That’s separate from the court doctrine I cover in piercing the corporate veil in California, and it points the same way: stripping a failing company doesn’t make its debts disappear.

Are contracts signed by a suspended company void?

Voidable, not void, and only at the other party’s option. Every contract a company makes in California while suspended by the FTB is voidable at the request of any party other than the company itself (Rev. & Tax. Code § 23304.1(a)). The suspended company can’t use its own suspension to get out of a deal.

The other party has to act through a court. The right can be exercised only in a lawsuit about the contract, and the court can’t enter judgment until the company has had a reasonable opportunity to cure through relief from voidability (Rev. & Tax. Code § 23304.5). If the court orders rescission, the company must receive full restitution of the benefits it provided.

That still gives the other party a strong hand. A tenant who wants out of a lease, or a buyer who wants out of a purchase, can raise voidability. The FTB says a corporation suspended only by the Secretary of State isn’t subject to contract voidability, which is one reason to know which agency suspended you.

Relief from contract voidability

A company can buy its way out of voidability. It applies to the FTB, files all required returns, pays everything owed, and pays a penalty of $100 for each day of the relief period, capped at the tax for that period (Rev. & Tax. Code § 23305.1(a), (b)). If relief is requested after revivor, the period runs from the suspension date to the date relief is granted, and the penalty is at least the minimum tax for the period (Rev. & Tax. Code § 23305.1(b)(2)).

Once granted, contracts from the relief period that no court has rescinded are enforceable as if they had never been voidable, and a real property transfer made during the period is as valid as if the company hadn’t been suspended (Rev. & Tax. Code § 23305.1(c)). The certificate can be recorded with the county recorder (Rev. & Tax. Code § 23305.1(d)). The FTB’s application is form FTB 2518BC.

The FTB says that if you buy relief before reviving, you can choose the relief period, and that when no return is due for a period it treats the $800 minimum tax as the tax due. For a small LLC with no LLC fee, that often means the cap works out to about $800 for each year of suspension. Ask the FTB for the figure before you pay.

How do I revive a suspended California LLC or corporation?

Cure what each agency suspended you for, in the right order. The steps depend on who suspended the company.

If only the FTB suspended you

1. Pull the account on MyFTB or call the FTB to see which years are missing and what’s owed.
2. File every past-due return. For an LLC, that’s Form 568 for each year.
3. Pay every past-due balance: tax, fees, penalties, and interest.
4. File the Application for Certificate of Revivor: FTB 3557 LLC for an LLC, or FTB 3557 BC for a corporation.
5. Decide whether you need relief from contract voidability, and if so file FTB 2518BC.

The statute requires all returns filed and all amounts paid before the FTB issues the certificate of revivor (Rev. & Tax. Code § 23305). The FTB also requires the company to be in good standing with the Secretary of State before it will revive it.

If only the Secretary of State suspended you

File a current Statement of Information on bizfile Online. Filing it lets the company be relieved of the Secretary of State suspension, unless the FTB is also holding it in suspension (Corp. Code § 17713.10(d)). A statement can be filed even while the company is suspended.

If both suspended you

Secretary of State first, then the FTB. The Secretary of State’s instructions: file a current Statement of Information, get a Secretary of State Proposed Relief Letter, then submit FTB 3557 with a copy of the letter to the FTB. The company stays suspended until both agencies’ requirements are met, according to the Secretary of State.

Who can apply?

More people than owners expect. Any stockholder or creditor, a majority of the surviving directors, an officer, or any other person with an interest in the relief can apply for the certificate of revivor (Rev. & Tax. Code § 23305). That matters when a family is sorting out a deceased owner’s company, which I cover in what happens to an LLC when the owner dies.

What if the company can’t pay everything?

Two statutory options exist. The FTB must issue a certificate of revivor if the company provides an acceptable assumption of liability, bond, deposit, or other security for what it owes (Rev. & Tax. Code § 23305.2). Separately, the FTB may revive a company without full payment if it determines revivor will improve the prospects of collecting the full amount, and that revivor can be limited in time or function (Rev. & Tax. Code § 23305b). Both are discretionary in practice. Your CPA or tax representative handles that negotiation with the FTB.

The fast track: walk-through revivor

If the company is in business litigation, a business escrow, or has a pending loan or pending federal grant, the FTB offers a walk-through revivor at its field offices. The cutoff to request one is 2 p.m., or 1 p.m. in Los Angeles, and the FTB says litigation or escrow in your personal name doesn’t qualify. Documents should be dated within 30 days, and the FTB’s checklist is FTB 3557 W PC.

What does revivor fix?

Revivor restores the company’s powers from that point on. It doesn’t erase everything that happened during the suspension. Reinstatement is without prejudice to any action, defense, or right that accrued because of the suspension (Rev. & Tax. Code § 23305a). Voidable contracts that haven’t been rescinded can be cured through relief from voidability.

In litigation, the effect of revivor on deadlines that ran during the suspension is a question for litigation counsel. I don’t litigate. If your company is suspended and in a lawsuit, or about to be sued, get litigation counsel involved now, and I can refer you. The revivor itself, the filings, and the company records are part of my business law work.

What happens if I ignore the suspension?

Eventually the FTB ends the company for you. The FTB administratively dissolves domestic corporations and cancels domestic LLCs that it has suspended for 60 or more consecutive months. It sends an intent notice, and you have 60 days from the notice date to object in writing. If you object, you get 90 days to revive. If you don’t, the company is dissolved or canceled, and the FTB says there are no appeal rights once that’s final.

That can sound like a free way out. It isn’t a substitute for closing the company properly if it has assets, debts, or property, and the FTB’s Publication 1038 says the Secretary of State can’t accept termination documents from a company the FTB has suspended until the FTB’s requirements are met. My page on how to dissolve an LLC in California covers the right order.

A worked example

A Simi Valley couple formed an LLC in 2021 to hold a rental condo. They stopped filing in 2023 after their bookkeeper retired. By 2026 the LLC is suspended by the FTB for the missing 2023 return and by the Secretary of State for missing its Statement of Information. In August 2026 they sign a listing agreement, and a buyer opens escrow in September.

1. The title company reports the LLC as suspended. It can’t convey the condo while suspended (Rev. & Tax. Code § 23302(d)).
2. They file a current Statement of Information and get the Secretary of State’s Proposed Relief Letter.
3. Their CPA files the 2023 through 2025 Forms 568 and pays each year’s $800 plus penalties and interest.
4. Because the sale is in escrow, they qualify for a walk-through revivor and bring FTB 3557 LLC with the relief letter.
5. The listing agreement was signed while suspended, so it’s voidable by the broker. They decide whether relief from contract voidability is worth buying for the August to September period.

Done in that order, escrow can close. Done out of order, it stalls while one agency waits on the other.

How do I check whether my company is suspended?

Search the company on the Secretary of State’s bizfile Online Business Search, which shows the status. The FTB says you may be able to find the reason for an FTB suspension through MyFTB. Check once a year when you pay the $800 tax, so you find a problem before a lender or buyer does.

Frequently asked questions

How do I revive a suspended LLC in California?

File all past-due returns, pay all past-due balances, and file FTB 3557 LLC for a certificate of revivor (Rev. & Tax. Code § 23305). If the Secretary of State also suspended the LLC, file a current Statement of Information and get its Proposed Relief Letter first.

What does “FTB suspended” mean?

The Franchise Tax Board suspended the company’s powers for unpaid tax, penalties, or interest, or for a missing return (Rev. & Tax. Code §§ 23301, 23301.5). The company can’t legally do business until it’s revived.

Can a suspended LLC be sued?

It can be named in a lawsuit, and the FTB says a suspended business can’t defend itself in court. Revive quickly and get litigation counsel involved.

Can a suspended company sell property?

No. A suspended taxpayer isn’t entitled to sell, transfer, or exchange real property in California (Rev. & Tax. Code § 23302(d)). Revive first, and consider relief from voidability for any contracts signed during the suspension.

How long does it take to revive a suspended LLC?

It depends on how many years are missing and whether both agencies suspended the company. Filing old returns is usually the slow step. A company in escrow, litigation, or a pending loan can ask for a walk-through revivor at an FTB office.

How much does it cost to revive a suspended LLC?

Every unpaid year’s $800 tax and any LLC fee, plus penalties and interest, plus the cost of preparing the missing returns. If the company doesn’t file within 60 days after an FTB demand, add $2,000 per year (Rev. & Tax. Code § 19135(a)). Relief from voidability, if you need it, is extra.

Can I form a new LLC instead of reviving the old one?

You can form a new one, but the old one’s tax debt, property, and contracts don’t move with you. A suspended LLC can’t legally dissolve, so it keeps accruing liability. If the old LLC holds anything of value, revive it and then close it or keep it properly.