Act Now to Fix Your Association’s Suspended Corporate Status

By Mark Petrie, Legal Assistant at SwedelsonGottlieb

Shakespeare’s Hamlet complains about the “law’s delay” as part of the reason he considers suicide. If he had lived today and tried to revive a California corporation’s suspended status with the Secretary of State, his decision would have been easy. Extended delays are placing California corporations (including homeowner associations) at serious risk of litigation exposure and may make them ineligible for disaster relief such as SBA funds, as well as causing them to suffer the extended suspension of other benefits of incorporation. Arguably, the greatest risk of suspended status is exposure to litigation, as the association may not prosecute nor defend a legal action without active status.

The Secretary of State’s December 1, 2010 Business Information Modernization Proposal Update states that due to state budget cuts to the Secretary of State’s office, processing times for California business filings are currently delayed for approximately 68 business days, or a little over three months. The office has been granted funds to create an online filing portal which is currently available for some corporate filings but not yet available for common interest developments to file the required Statement of Information and Statement by Common Interest Development forms. As of the date of this post, the Secretary of State is reporting processing of these forms received on August 16, 2010.

Keep in mind that filing the required forms with the Secretary of State’s office may only be the first step to returning the association’s status to “active”. If outstanding amounts are due to the Franchise Tax Board, further steps must be taken to restore the corporation’s active status.

Follow this link to check your association’s corporate status. Your association’s managing agent may be able to assist you with restoring your active corporate status, and we are also available to assist if needed – please contact me at 310-207-2207 or via email at

More information from the Franchise Tax Board regarding suspended status can be found here.

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