Legal Question in Administrative Law in California

Re: Revoked Corporation

A "corporation" whose charter is revoked by the state of its incorporation ceases to exist for most purposes, perhaps all (the question would involve Nevada law, which I don't practice).

The corporation could not maintain a qualified-to-do-business status in California, and thus could not maintain a lawsuit in California courts.

Failure to qualify as a foreign corporation in California is an additional reason why the "corporation" could not sue here.

As I understand it, the "corporation" could file its suit, but the defendant could have the suit thrown out by filing an appropriate responsive pleading such as a demurrer or answer alleging (technically, through a "plea in abatement") the lack of capacity to sue.

A shareholder can sue third parties on behalf of a corporation; this is called a shareholder derivative action. However, it is unlikely that the courts would allow a derivative suit to accomplish what the corporation itself is powerless to do -- that would circumvent the purposes of the laws disempowering suspended corporations. There is at least one recent California case to that effect, but it is unpublished and hence cannot be cited. Nevertheless, the reasoning seems sound.

Finally, there are a couple of other fine points, including whether a suspension in California law is equivalent to revocation in Nevada, whether there are other defenses to the debt, and so on.