2005 California Revenue and Taxation Code Sections 23301-23305e Article 7. Suspension and Revivor

23301.  Except for the purposes of filing an application for exempt
status or amending the articles of incorporation as necessary either
to perfect that application or to set forth a new name, the corporate
powers, rights and privileges of a domestic taxpayer may be
suspended, and the exercise of the corporate powers, rights and
privileges of a foreign taxpayer in this state may be forfeited, if
any of the following conditions occur:
   (a) If any tax, penalty, or interest, or any portion thereof, that
is due and payable under Chapter 4 (commencing with Section 19001)
of Part 10.2, or under this part, either at the time the return is
required to be filed or on or before the 15th day of the ninth month
following the close of the taxable year, is not paid on or before 6
p.m. on the last day of the 12th month after the close of the taxable
year.
   (b) If any tax, penalty, or interest, or any portion thereof, due
and payable under Chapter 4 (commencing with Section 19001) of Part
10.2, or under this part, upon notice and demand from the Franchise
Tax Board, is not paid on or before 6 p.m. on the last day of the
11th month following the due date of the tax.
   (c) If any liability, or any portion thereof, which is due and
payable under Article 7 (commencing with Section 19131) of Chapter 4
of Part 10.2, is not paid on or before 6 p.m. on the last day of the
11th month following the date that the tax liability is due and
payable.
23301.5.  Except for the purposes of filing an application for
exempt status or amending the articles of incorporation as necessary
either to perfect that application or to set forth a new name, the
corporate powers, rights, and privileges of a domestic taxpayer may
be suspended, and the exercise of the corporate powers, rights, and
privileges of a foreign taxpayer in this state may be forfeited, if a
taxpayer fails to file a tax return required by this part.
23301.6.  Sections 23301, 23301.5, and 23775 shall apply to a
foreign taxpayer only if the taxpayer is qualified to do business in
California.  A taxpayer that is required under Section 2105 of the
Corporations Code to qualify to do business shall not be deemed to
have qualified to do business for purposes of this article unless the
taxpayer has in fact qualified with the Secretary of State.
23302.  (a) Forfeiture or suspension of a taxpayer's powers, rights,
and privileges pursuant to Section 23301, 23301.5, or 23775 shall
occur and become effective only as expressly provided in this section
in conjunction with Section 21020, which requires notice prior to
the suspension of a taxpayer's corporate powers, rights, and
privileges.
   (b) The notice requirements of Section 21020 shall also apply to
any forfeiture of a taxpayer's corporate powers, rights, and
privileges pursuant to Section 23301, 23301.5, or 23775 and to any
voidability pursuant to subdivision (d) of Section 23304.1.
   (c) The Franchise Tax Board shall transmit the names of taxpayers
to the Secretary of State as to which the suspension or forfeiture
provisions of Section 23301, 23301.5, or 23775 are or become
applicable, and the suspension or forfeiture therein provided for
shall thereupon become effective.  The certificate of the Secretary
of State shall be prima facie evidence of the suspension or
forfeiture.
   (d) If a taxpayer's powers, rights, and privileges are forfeited
or suspended pursuant to Section 23301, 23301.5, or 23775, without
limiting any other consequences of such forfeiture or suspension, the
taxpayer shall not be entitled to sell, transfer, or exchange real
property in California during the period of forfeiture or suspension.
23303.  Notwithstanding the provisions of Section 23301 or 23301.5,
any corporation that transacts business or receives income within the
period of its suspension or forfeiture shall be subject to tax under
the provisions of this chapter.
23304.1.  (a) Every contract made in this state by a taxpayer during
the time that the taxpayer's corporate powers, rights, and
privileges are suspended or forfeited pursuant to Section 23301,
23301.5, or 23775 shall, subject to Section 23304.5, be voidable at
the instance of any party to the contract other than the taxpayer.
   (b) If a foreign taxpayer that neither is qualified to do business
nor has a corporate account number from the Franchise Tax Board,
fails to file a tax return required under this part, any contract
made in this state by  that taxpayer during the applicable period
specified in subdivision (c) shall, subject to Section 23304.5, be
voidable at the instance of any party to the contract other than the
taxpayer.
   (c) For purposes of subdivision (b), the applicable period shall
be the period beginning on January 1, 1991, or the first day of the
taxable year for which the taxpayer has failed to file a return,
whichever is later, and ending on the earlier of the date the
taxpayer qualified to do business in this state or the date the
taxpayer obtained a corporate account number from the Franchise Tax
Board.
   (d) If a taxpayer fails to file a tax return required under  this
part, to pay any tax or other amount owing to the Franchise Tax Board
under this part or to file any statement or return required under
Section 23772 or 23774, within 60 days after the Franchise Tax Board
mails a written demand therefor, any contract made in this state by
the taxpayer during the period beginning at the end of the 60-day
demand period and ending on the date relief is granted under Section
23305.1, or the date the taxpayer qualifies to do business in this
state, whichever is earlier, shall be voidable at the instance of any
party to the contract other than the taxpayer.  This subdivision
shall apply only to a taxpayer if the taxpayer has a corporate
account number from the Franchise Tax Board, but has not qualified to
do business under Section 2105 of the Corporations Code.  In the
case of a taxpayer that has not complied with the 60-day demand, the
taxpayer's name, Franchise Tax Board corporate account number, date
of the demand, date of the first day after the end of the 60-day
demand period, and the fact that the taxpayer did not within that
period pay the tax or other amount or file the statement or return,
as the case may be, shall be a matter of public record.
23304.5.  A party that has the right to declare a contract to be
voidable pursuant to Section 23304.1 may exercise that right only in
a lawsuit brought by either party with respect to the contract in a
court of competent jurisdiction and the rights of the parties to the
contract shall not be affected by Section 23304.  1 except to the
extent expressly provided by a final judgment of the court, which
judgment shall not be issued unless the taxpayer is allowed a
reasonable opportunity to cure the voidability under Section 23305.1.
  If the court finds that the contract is voidable under Section
23304.1, the court shall order the contract to be rescinded.
However, in no event shall the court order rescission of a taxpayer's
contract unless the taxpayer receives full restitution of the
benefits provided by the taxpayer under the contract.
23305.  Any taxpayer which has suffered the suspension or forfeiture
provided for in Section 23301 or 23301.5 may be relieved therefrom
upon making application therefor in writing to the Franchise Tax
Board and upon the filing of all tax returns required under this
part, and the payment of the tax, additions to tax, penalties,
interest, and any other amounts for nonpayment of which the
suspension or forfeiture occurred, together with all other taxes,
additions to tax, penalties, interest, and any other amounts due
under this part, and upon the issuance by the Franchise Tax Board of
a certificate of revivor.  Application for the certificate on behalf
of any taxpayer which has suffered suspension or forfeiture may be
made by any stockholder or creditor, by a majority of the surviving
trustees or directors thereof, by an officer, or by any other person
who has interest in the relief from suspension or forfeiture.
23305.1.  (a) A taxpayer may make application to the Franchise Tax
Board for relief from the voidability provisions of Section 23304.1.
To be relieved from voidability, the taxpayer shall do all of the
following:
   (1) Provide the Franchise Tax Board with an application for relief
from contract voidability in a form and manner prescribed by the
Franchise Tax Board.
   (2) Include on the application the period for which relief is
requested in accordance with subdivision (b).
   (3) File any tax returns required to be filed under this part with
the Franchise Tax Board, including returns for the period for which
relief is requested.
   (4) Pay any tax, additions to tax, penalties, interest, and any
other amounts owing to the Franchise Tax Board, including any
liability attributable to the period for which relief is requested.
   (5) Pay any penalty imposed under subdivision (b) for the period
for which relief is requested.
   (6) In the case of a taxpayer that applies for and enters into an
approved voluntary disclosure agreement in accordance with Article 8
(commencing with Section 19191) of Chapter 4 of Part 10.2, for
purposes of this section, the taxpayer shall be considered to have
met the requirements of paragraphs (3), (4), and (5) if the taxpayer
fulfills to the satisfaction of the Franchise Tax Board all the
specifications of the voluntary disclosure agreement within the
meaning of paragraph (2) of subdivision (d) of Section 19191 and if
the Franchise Tax Board has not found that any of the circumstances
described in Section 19194 has rendered the voluntary disclosure
agreement null and void.
   (b) (1) Except as provided in paragraph (2), both of the following
shall apply:
   (A) The period for which relief is requested shall begin on the
date that one of the taxpayer's taxable years begins and ends on the
date that relief is granted.
   (B) The Franchise Tax Board shall assess a daily penalty equal to
one hundred dollars ($100) for each day of the period for which
relief from voidability is granted, but not to exceed a total penalty
equal to the amount of the tax for the period for which relief is
requested.
   (2) If an application for relief from voidability is filed for a
period in which an application for revivor has been filed and the
certificate of revivor has been issued, all of the following shall
apply:
   (A) The period for which relief is requested shall begin on the
date the taxpayer's powers, rights, and privileges had been suspended
or forfeited and ends on the date relief is granted.
   (B) The Franchise Tax Board shall assess a daily penalty equal to
one hundred dollars ($100) for each day of the period for which
relief from voidability is granted, but not to exceed a total penalty
equal to that amount of the tax that would be imposed under Section
23151 and, except as provided in subparagraph (C), that penalty shall
be equal to no less than the amount of the minimum tax provided
under Section 23153 for the period for which relief is requested.
   (C) In the case of an exempt organization or trust subject to
Article 2 (commencing with Section 23731) of Chapter 4 (the tax on
unrelated business taxable income), the daily penalty provided in
subparagraph (B) shall not exceed a total penalty equal to the amount
of tax imposed upon its unrelated business taxable income for the
period for which relief is requested.
   (3) Any penalty imposed under this subdivision shall, subject to
Section 23305.2, be due and payable on demand by the Franchise Tax
Board.
   (c) (1) Upon satisfaction of the conditions specified in
subdivision (a), including through the application of Section
23305.2, the following shall apply:
   (A) All contracts entered into during the period for which relief
is granted that have not been rescinded by a final court order
pursuant to Section 23304.5 may be enforced in the same manner and to
the same extent, with regard to both the parties to the contract and
any third parties, as if the contract had never been voidable.
   (B) Any sale, transfer, or exchange of real property in California
during the period for which relief is granted and which the taxpayer
at that time was not entitled to sell, transfer, or exchange by
reason of subdivision (d) of Section 23302 and which has not been
rescinded by a final court order pursuant to Section 23304.5, shall
be as valid as if the taxpayer had not been subject to subdivision
(d) of Section 23302 at the time of the sale, transfer, or exchange.
   (2) Upon being granted relief from voidability, the Franchise Tax
Board shall certify that relief to the taxpayer in a form and manner
as prescribed by the Franchise Tax Board.  The certificate shall be
issued or mailed to the taxpayer, or as directed by the taxpayer, and
shall indicate the period for which relief is granted.
   (d) The fact that a certificate of relief from voidability was
issued pursuant to this section and the information contained on that
certificate shall be subject to public disclosure.  The certificate
shall be prima facie evidence of the relief from voidability for
contracts entered into during the period of relief stated on the
certificate and the certificate may be recorded in the office of the
county recorder of any county of this state.
   (e) Subject to limitations set forth in Section 17 of Chapter 926
of the Statutes of 1990, a taxpayer that received a certificate of
revivor between January 1, 1990, and January 1, 1991, may apply for
relief from voidability under this section.
23305.2.  Notwithstanding Sections 23305 and 23305.1 that require a
taxpayer to pay any liability to the Franchise Tax Board as a
condition to revivor or relief from voidability, the Franchise Tax
Board shall issue a certificate of revivor under Section 23305, or of
relief from voidability under Section 23305.1, if the taxpayer
provides the Franchise Tax Board with an assumption of liability, or
a bond, deposit, or other security for taxpayer's liability, that is
acceptable to the Franchise Tax Board.  The Franchise Tax Board shall
notify the person filing the application for revivor or relief from
voidability of the amount of the bond, deposit, or other security, or
of the terms of an assumption of liability, that must be furnished
as a condition of the revivor or the relief from voidability.
Obtaining revivor or voidability relief by securing the debt pursuant
to this section shall not constitute an admission of liability by
the taxpayer, nor relieve the taxpayer or any individual or
corporation from liability for any taxes, additions to tax,
penalties, or interest imposed by this part.  A taxpayer that
provides an assumption of liability or a bond, deposit, or other
security to obtain revivor or relief from voidability may,
notwithstanding Section 23305 or 23305.1, file any returns required
under those sections within a reasonable time after relief is granted
by the Franchise Tax Board.
23305.5.  (a) For the purposes of this article, "taxpayer" shall
include any limited liability company, foreign or domestic, that is
organized in this state or registered with the Secretary of State.
   (b) For purposes of this article, in the case of a limited
liability company:
   (1) "Articles of incorporation" shall include a limited liability
company's articles of organization.
   (2) "Tax" shall include the tax and fee imposed by Sections 17941
and 17942, or former Sections 23091 and 23092, respectively.
23305a.  Before the certificate of revivor is issued by the
Franchise Tax Board, it shall obtain from the Secretary of State an
endorsement upon the application of the fact that the name of the
taxpayer then meets the requirements of subdivision (b) of Section
201 of the Corporations Code in the case of a domestic taxpayer or of
subdivision (b) of Section 2106 of the Corporations Code in the case
of a foreign taxpayer that has qualified to do business.  The
reference to amendment of the articles of incorporation to set forth
a new name contained in Sections 23301, 23301.5, and 23775 includes
in the case of a foreign taxpayer the filing of an amended statement
and designation to set forth its new name or to set forth an assumed
name under subdivision (b) of Section 2106 of the Corporations Code.
Upon the issuance of the certificate by the Franchise Tax Board the
taxpayer therein named shall become reinstated but the reinstatement
shall be without prejudice to any action, defense or right which has
accrued by reason of the original suspension or forfeiture, except
that contracts which were voidable pursuant to Section 23304.1, but
which have not been rescinded pursuant to Section 23304.5, may have
that voidability cured in accordance with Section 23305.1.  The
certificate of revivor shall be prima facie evidence of the
reinstatement and the certificate may be recorded in the office of
the county recorder of any county of this state.
23305b.  Notwithstanding the provisions of Section 23305, the
Franchise Tax Board may revive a corporation to good standing without
full payment of the taxes, penalties and interest due if it
determines that the revivor will improve the prospects for collection
of the full amount due.  Such revivor may be limited as  to time or
may limit the functions the revived corporation can perform, or both.
  The corporate powers rights, and privilege's may again be suspended
or forfeited if the Franchise Tax Board determines that the
prospects for collection of the full amount due have not been
improved by the revivor of the corporation.
23305c.  (a) Upon issuance of the certificate of revivor, the
Franchise Tax Board shall transmit to the Secretary of State the
revived taxpayer's name and its corporate number.
   (b) The taxpayer's name and number, the fact that the taxpayer's
corporate powers, rights, and privileges have been revived and the
effective date of the revivor shall be a matter of public record.
   (c) If the Franchise Tax Board determines that a suspension or
forfeiture was in error by the Franchise Tax Board, the Franchise Tax
Board shall, in connection with the revivor, indicate that the
taxpayer is "restored."  The status of the restored taxpayer shall be
retroactive to the date of suspension or forfeiture as if there had
been no suspension or forfeiture.
   (d) If the Franchise Tax Board determines that the mailing of the
60-day demand notice referred to in subdivision (d) of Section
23304.1 was in error or that the Franchise Tax Board's original
determination as to compliance with the 60-day demand notice was in
error, the Franchise Tax Board's revised conclusions also shall be
part of the public record referred to in that subdivision.
23305d.  A certificate of suspension or forfeiture from the
Franchise Tax Board setting forth that the suspended or forfeited
taxpayer has been notified of its liability for tax or requirement to
file a return under this part and that the tax has not been paid or
the return has not been filed, shall constitute prima facie evidence
of the facts.
23305e.  (a) The Franchise Tax Board may provide letters of good
standing, verifying a corporation's status for doing business in
California, at a charge reflecting the reasonable costs to the
department of responding to these requests.
   (b) Fees received under this section shall be handled in
accordance with Section  19604.