Legal Question in Business Law in California

business law/ C Corporations

in california, a corporation has to pay the franchise tax board $800.00/year when filing taxes if the do business or not. If the corporation did not receive and billing fron the fanchise tax board and did not make money for the years how can it claim hardship Because it doesn't have the money and it has only been trying to build business credit and establish tradelines in oder in the future to be able to create a buisness that makes money and hopefully keep the corporation in good standing


Asked on 3/30/07, 3:07 pm

2 Answers from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

Re: business law/ C Corporations

The California Franchise Tax Board does not grant hardship waivers simply because the corporation didn't make any money during the time period in question. If you fail to pay the $800 yearly fee, the FTB will suspend your corporate status and privileges. The FTB will usually require you to pay interest as well in order to be reintated. I've gotten the FTB to waive the interest for some clients, but they will not waive the $800.

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Answered on 3/30/07, 3:35 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: business law/ C Corporations

The franchise tax is assessed for the privilege of being a California corporation in good standing, and as far as I know, there is no provision allowing a corporation to declare itself exempt based upon lack of activity. Further, the FTB doesn't mail bills and corporations are expected to pay without reminder. I believe there is a notice to that effect included in the FTB's mailings to all new corporations.

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Answered on 3/30/07, 4:09 pm


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