Suspended Exempt Entities
- What causes suspension and its effects on tax-exempt status
- Contract voidability
- Tax-exempt status revocation
- How to bring your organization into good standing
- Revivor denied, name not available
There are three primary ways an organization may become suspended:
- Failure to file your Statement of Information with the Secretary of State's (SOS) office.
- Failure to pay an amount due.
- Failure to file any past due tax returns with the Franchise Tax Board (FTB).
When FTB or SOS suspends an organization, it cannot legally transact business, defend or initiate an action in court, protest assessments, or file a claim for refund of paid amounts. Your organization also loses the right to use the entity name.
Your organization will remain suspended by SOS until all revivor requirements are met.
Contract voidability is defined as when a suspended or forfeited business entity loses the right to enforce its legal contracts. If a business enters into a contract while suspended or forfeited and then revives its active legal status, the business cannot enforce that contract unless it gets relief from contract voidability (RCV).
For more information regarding RCV, see “Why would I need relief from contract voidability (RCV)?”
Once either FTB or SOS suspends an organization, their tax-exempt status may be revoked. Once the tax-exempt status is revoked, FTB 3500, Exemption Application must be filed again to re-apply for tax-exempt status.
FTB suspended only
If the tax-exempt status was not revoked, complete FTB 3557E, Application for Certificate of Revivor, and send it to the Exempt Organizations Unit mailing address. We will send you information of what is required for the entity to comply with us. Once the entity is in compliance, we will send a letter that indicates the entity is now in good standing with FTB.
SOS suspended only
To revive the organization, file a current Statement of Information with SOS. A common interest development corporation must submit a Statement by Common Interest Development Association (Form SI-CID) together with the Statement of Information. Go to sos.ca.gov for these forms. Once the organization is in good standing, SOS will send the entity a letter of proposed relief from suspension or forfeiture.
Both FTB and SOS suspended
The entity should first follow the instructions for SOS suspended only. Once SOS provides a letter of proposed relief from suspension or forfeiture, and if the tax-exempt status was not revoked, complete and send FTB 3557E, Application for Certificate of Revivor, to the Exempt Organizations Unit mailing address. We will send you information of what is required for the organization to comply with us. Once the organization is in compliance, we will send a letter that indicates your organization is now in good standing with FTB.
SOS will deny a revivor request from FTB if the corporation name is no longer available. A letter is sent to the corporation advising them that the name is no longer available and the corporation must change their name. Go to sos.ca.gov and search for name availability for information on how to change the corporation name.
After the name is changed, the corporation must resubmit FTB 3557E, Application for Certificate of Revivor, to the address on the form.