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Can a corporation suspended by the State of California file a Chapter 7 Petition in bankruptcy?

Sylmar, CA |

My corporation was suspended by the State of California for failure to pay corporate fees and taxes. Now the corporation is being sued. Can a suspended corporation apply for bankruptcy (Chapter 7)? Or does it's suspended status mean the corporation can't even file for bankruptcy?

Attorney Answers 5


No, a suspended corporation cannot file for bankruptcy. Additionally, the filing of a petition on behalf of a suspended corporation is a criminal offense.

Revenue and Taxation Code § 19719. (a) Any person who attempts or purports to exercise the powers, rights, and privileges of a corporation that has been suspended pursuant to Section 23301 or who transacts or attempts to transact intrastate business in this state on behalf of a foreign corporation, the rights and privileges of which have been forfeited pursuant to the section, is punishable by a fine of not less than two hundred fifty dollars ($250) and not exceeding one thousand dollars ($1,000), or by imprisonment not exceeding one year, or both fine and imprisonment.

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1 comment

Manuel Alzamora Juarez

Manuel Alzamora Juarez


Very informative answer. Another landmine to avoid in our practices. Thanks for sharing that pearl of wisdom!!


I agree with Mr. Daymude, a suspended corporation cannot apply for bankruptcy.

Our replies to Avvo questions should not be considered specific legal advice to any individual, and no attorney-client relationship is formed with you. Our aim is to provide general principles that may be useful to the Avvo community as a whole. You should seek individual legal advice pertaining to your specific factual situation, and the laws applicable to your jurisdiction. Moore & Moore Attorneys at Law --

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It is generally known that it is a bad idea to file a Chapter 7 for a corporation because corporations cannot obtain a discharge. More likely than not, you may have personally guaranteed the corporation's debts, so you may have to look at the unfortunate option of filing a personal bankruptcy.

Hope this perspective helps!

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Unless you revive the corporation (remove its suspension), it cannot (a) defend the existing suit or (b) file a bankruptcy action.

Please see the post at the link below.

This information does not constitute legal advice and does not establish an attorney-client relationship.

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The simple answer is that unless you file a 'revivor' with the Secretary of State's office a suspended corporation is just that suspended, and unable to do business. Once the 'revivor' (might be a different name presently) is filed and the back fees and penalties or other issues are resolved then your company can again do business as a company in California.

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