Expert Advice When You Need It Most

A ca corporation was formed; nothing was done beyond incorporation. It was suspended for non payment of taxes.

Asked over 2 years ago - Sacramento, CA

An agent was used to process the paperwk. Corp officer did not know the complete guidelines and process. The original intent was to file for federal 501 (c) 3 exempt status. However, the corp. merely sat inactive for nearly four (4) years; nothing was done beyond the articles being filed. Due to the ignorance of the officer, taxes were not filed. When the officer went to the SOS to get info about next steps in moving forward with the corporation, he found out 1) application was never made at the state level for the corporation to be exempt and 2) the corporation was suspended. The officer refiled the articles at the SOS & intends to file the back taxes & forms for state exempt status. Is it better to reinstate @ this point or completely dissolve & start over? What's easier/faster?

Flag

Save

Share with:

Attorney answers (3)

Mark L Rosenberg

Reputation Level 15

Answered over 2 years ago. Corporate / Incorporation Lawyer in Bethesda, MD.

Flag

If the corporation has had no activity, there is no reason to reinstate. Just form it again and make sure that the paperwork is done properly. Remember that forming a "non-profit" corporation in a state does not make you tax exempt for federal purposes until and unless a 501(dc)(3) application is filed and approved by the IRS.

Mark L. Rosenberg

Mark as good answer

2 people marked this answer as good

Add comment

Jose Isaia Ybanez Utzurrum

Reputation Level 8

Answered over 2 years ago.

Flag

I believe that either way it would be a wash, as in order to dissolve you have to become current with the corporate taxes and get certification from the FTB, i.e., if you intend to keep the same corporate name. Reinstating and dissolving really would require the same steps from a tax perspective.

Mark as good answer

1 person marked this answer as good

Add comment

Benjamin James Sowards

Reputation Level 8

Answered over 2 years ago. Corporate / Incorporation Lawyer in Milpitas, CA.

Flag

I would just start from scratch. Keep in mind that obtaining 501(c)(3) status takes a decent amount of work. You will either need to hire a good attorney or CPA to move the process along or plan to spend several hours going through the paperwork yourself. You will need bank records, corporate documents and resolutions, etc. in order to get the tax exempt status. The good news is that if you miss anything the IRS will review the application and then allow you to resubmit the missing material.

Mark as good answer

1 person marked this answer as good

Add comment