What to do if your business is suspended

| Mar 20, 2021 | Tax Law |

The state of California holds the right to suspend any business that doesn’t properly pay its tax bill. During this suspension, the business loses its rights, privileges and powers to do business within the state. In the event that your business is suspended due to taxes, you’ll need to follow the correct procedure to revive your business.

How a suspension can affect your business

One of the biggest downfalls of a business suspension is that you’re not able to do business within the state. You also may not enter into any contract with another party if you’re not in good standing. If you do, the other party can void the contract without any legal repercussions. It’s also possible that your business name may be registered by another business, and you may no longer be entitled to it.

Why your business may get suspended

For the most part, businesses tend to be suspended when they do one of two things. The first is that they fail to file their tax return according to California tax law. The second is if they fail to pay their taxes, fees, interest and penalties.

The steps to revival

In order to revive your business, you’ll need to take three steps. First, you’ll need to file any tax returns that are currently past due. Second, you need to pay all your past-due tax balances. Lastly, you’ll need to file a request form for the revival of your business. This is formally referred to as an Application for Certification of Revivor.

If you’ve been alerted by the government that your business has been suspended, you likely have a lot of questions. Reviving your business is completely possible when you follow the right steps. It’s always advisable to hire an attorney to help with your case.