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Business Status and Consequences of Forfeiture
- If a company goes bankrupt, the LLC’s remaining debts are wiped out and the LLC is no longer in business.
- Sole proprietorships and partnerships are common business structures for new businesses, but some owners choose to organize businesses as limited liability companies (LLCs) because they can protect owners from personal liability for business debts.
Reviving a Forfeited Corporation
- Reinstate with the California SOS: If your corporation has been suspended or forfeited by the California Secretary of State, you can request revival by filing a current Statement of Information form by mail, online, or in person.
Understanding Forfeiture and Inactive Business Status
- A forfeited corporate entity loses its right to operate in that state. It still has to pay any taxes or fees it owes the state, though.
- In most circumstances, a business is forfeited only after it has been “not in good standing,” so the most common reasons for forfeiture are the same as the reasons businesses fall out of good standing.
Handling Inactive LLCs
- If an LLC is inactive, it might be difficult to get funding or investment from financial institutions. Additionally, the LLC might be subject to penalties from the government if it doesn’t file the required paperwork.
Termination and Dissolution of LLC
- What is the difference between termination and dissolution of LLC? Dissolution is the winding up of the affairs of the entity in advance of the termination of the entity. Termination of the entity occurs when the entity ceases to legally exist.
Closing a Business
- As noted before, until the company is dissolved, it will still exist. Even when a business is inactive, this doesn’t mean it’s not subject to certain reporting requirements.
- What is the process to dissolve a company? Follow these steps to closing your business: Decide to close.
