Reviving a Suspended LLC
- michael64671
- 4 days ago
- 3 min read
Updated: 2 days ago
LLCs can fall out of good standing or become suspended for a variety of reasons, often unintentionally. Whether due to missed filings, unpaid fees, or administrative oversight, a suspended LLC can’t legally operate, enforce contracts, or maintain its liability protections. Fortunately, in most states, revival is possible.
Here’s what every LLC owner or member needs to know about bringing a suspended company back to active status.
Common Causes of LLC Suspension
Across the U.S., the most frequent reasons an LLC gets suspended or forfeited include:
Failure to file annual or biennial reports
Non-payment of franchise taxes or other state fees
Neglecting to maintain a registered agent
Ignoring state correspondence or legal process
When an LLC is suspended, it loses its legal capacity to do business, sue or defend itself in court, or even maintain its business bank account in many cases.
General Steps to Reinstate a Suspended LLC
While each state has its own procedures, the general process to revive a suspended LLC typically includes the following:
Identify the Cause: Check with the Secretary of State (or equivalent state agency) to determine the reason for the suspension and which agencies are involved (e.g., Department of Revenue or Taxation).
File Past-Due Reports: Submit all delinquent annual or biennial reports, including any amendments required to update business information.
Pay Outstanding Fees: This may include penalties, interest, and reinstatement or revival fees.
Resolve Tax Issues: In many states, resolving tax delinquencies is essential. This may involve filing back tax returns or working with the state tax authority to clear balances.
Submit a Reinstatement Application: Most states require a formal application for reinstatement or revival, which may also require a certificate of tax clearance.
Receive Confirmation: Once approved, the state will issue a certificate or notice confirming the LLC’s return to good standing.
California-Specific Considerations
California has some unique requirements compared to other states:
Suspensions Can Be by the Secretary of State or the Franchise Tax Board (FTB): California LLCs can be suspended by either agency. Each must be addressed separately if both have issued suspensions.
Tax Clearance Not Required, But FTB Reinstatement Is: Unlike some states that require a tax clearance certificate, California requires suspended LLCs to file specific forms with the FTB, usually Form 3557 (Application for Certificate of Revivor).
Secretary of State Filings: If the suspension is due to missing Statements of Information, the LLC must file any late reports and pay the associated penalties. Once these filings are current, and any FTB issues are resolved, the LLC may be reinstated.
No Business Until Revived: A suspended LLC in California may not legally operate until it is revived—contracts signed during suspension may be considered voidable.
Practical Tips
Check All Agencies: Suspension may involve both business and tax departments. Make sure to resolve all issues, not just those listed by the Secretary of State.
Maintain Registered Agent Info: Keeping this current helps ensure the LLC receives critical compliance notices.
Automate Reminders: Use a calendar or compliance service to track annual requirements and deadlines.
Summary
Reviving a suspended LLC is often more a matter of paperwork and penalties than litigation, but it’s essential to act quickly. If left unresolved, suspension can jeopardize contracts, create tax liabilities, and even expose owners to personal liability in certain cases.
When in doubt, consult with an attorney or tax professional familiar with your state’s requirements, especially in states like California where multiple agencies play a role. Taking swift, informed action can bring your business back to good standing and help you avoid future pitfalls.
Spiller Law is an advisor to startup businesses, entertainment and media companies, creators and artists. Feel free to schedule a free consultation.
Spiller Law is a San Francisco business and entertainment law firm. We serve clients in the San Francisco Bay Area, Silicon Valley, Los Angeles, and California. Feel free to arrange a free consultation using the Schedule Appointment link on our website. For other questions, call our offices at 415-991-7298.
The information provided in this article is for general informational purposes only and should not be construed as legal advice or opinion. Readers are advised to consult with their legal counsel for specific advice.
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