Corporation And Limited Liability Company Compliance

In the state of California, Statement of Information is legally required for Corporations (inc) and Limited Liability Company’s (LLC) and Nonprofit Corporations. Most states will require a Statement of information, some states will refer the report by a different name. For example, the State of Texas is the Public Information Report (PIR). 

When an entity is first registered with the state of California. The initial fillings for both Corporations and Limited Liability Companies must file their first Statement of Information within 90 days of registering entity with the state of California.

Statement of information for C- Corporations and S- Corporations are due annually. Limited Liability Companies, Limited Liability Partnerships and Nonprofit Corporations fillings are due every two years. If your business information changes before your regular filling date an updated Statement of Information is due immediately.

Why is Statement of information important to file on time?  The state of California can apply a late fee penalty of $250. State may also issue a Suspension or forfeit the entity status. 

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17702.09.&lawCode=CORP

If the state of California Suspends your entity and FTB applies a Suspension to your entity, you legally forfeit your right to do business. Contracts cannot be enforced. Other companies can legally cancel existing contracts. Entity cannot enter new contracts or sue for non- payment on existing contracts. Furthermore, entity cannot defend itself against any lawsuits during the time of Suspension. In addition, the Suspended entity can forfeit its legal right to its name and cannot legally do business. The suspended entity cannot sell, transfer or exchange real property and much more.

An Entity that has been suspended can be revived. There are several steps that need to be taken in order to revive a Corporation or Limited Liability Company. Business must be in good standing with the State and Franchise Tax Board. Including any Past due Statement of information, delinquent tax returns and paying Penalties, Interest and fees plus up to date on California annual Franchise Tax due on the 15th of April. 

If you have any questions or need help please reach out. We are here to take care of our clients.