Legal Question in Business Law in California

Re: Conversion from Foreign to California

I don't have much to add to the previous two responses other than to repeat the advice that you do not ignore the Nevada entity and find out what has gone on with your resident agent.

Speak to a Nevada attorney or at least consult the Nevada Sec of State web site. If nothing else, look into cleaning up your 'revoked' status. You may just need to dissolve the Nevada Company.

Re: Conversion from Foreign to California

Dont just ignore the Nevada entity. You have to figure out what is going on and deal with it.

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Re: Conversion from Foreign to California

First, you asked this as a "California law applies" question, and it looks to me as though Nevada law applies to many if not most aspects of your problem. I'll try to answer according to how this would fall out if Nevada laws and policies were the same as California's - which they aren't, but the answer may still be somewhat useful.

In California, a corporation is "suspended," pretty much the same as "revoked," when it fails to file semiannual statements of officers, etc. or to pay the minimum franchise tax. It can be revived by someone's curing the delinquencies and filing an application for revivor, but while its powers are suspended, the corporation cannot itself do anything. If it has entered into any contracts, those contracts are voidable at the option of the other parties thereto.

Who was the resident agent? Someone you know and trusted and who was given authority to conduct business such as signing and filing documents and paying franchise taxes? Or was it some incorporation service company that set up your Nevada corporation for $129 or so, but you never met? If the former, criticize the individual for neglecting his duties. If the latter, criticize youselves for laxity in managing the corporation's affairs.

Although as I say I can't practice Nevada law, I have personally been involved in two or three Nevada corporations, decades ago, that went out of business "informally" so to speak, and we never heard boo from the Nevada Secretary of State or tax collector after walking away from the businesses. Times, laws and policies do change, to be sure, but my hunch is you'll be OK.

Finally, you should be aware that there may be income tax and accounting issues that arise from the transfer of a business activity out of one entity into another. I recommend working with an accountant that has some familiarity with income tax and the tax and book value consequences of business reorganizations such as yours. The change you're making very well may be "tax neutral" but I am sure not the one to determine that.