Legal Question in Business Law in California

Re: Corporate

A suspended corporation cannot appear, prosecute or defend. However, keep in mind that they CAN get a revivor through the Secretary of State's office.

Depending on the stage of the case and what is going on, certain actions can be taken.

Re: Corporate

A suspended corporation may change its name or apply for tax-exempt status. Otherwise, no corporate action is permissible. Revenue & Taxation Code section 23301.

A suspended corporation can be served with process in the same manner as service on a corporation that has not been suspended. However, the suspended corporation cannot sue or defend in state courts. The fact of suspension should be raised by the other party as an affirmative defense. Likewise, a suspended corporation cannot appeal an adverse judgment.

Incapacity to sue or defend in state court may also impair its rights in federal court. Matter of Christian & Porter Aluminum Co. (9th cir. 1978) 584 F.2d 326 at 331.

An attorney who discovers (or knows) that his or her corporate client is suspended has a duty to so advise the court. Failure to advise the court is evidence of bad faith and may support an award of sanctions against the client and/or attorney for maintaining an unwarranted action (Code of Civil Procedure section 128.7) and/or abusing the discovery process (CCP 2023). See Palm Valley Homeowners' Assoc. v. Design MTC, 85 Cal.App. 4th 553 at 562.

The suspended corporation's insurer may, however, intervene and defend against a claim where it has potential liability under the insurance.

Also, in some instances a shareholder of the suspended corporation may maintain a derivative lawsuit on its behalf against its officers or directors.

Reinstatement may be applied for by any officer, stockholder or creditor of the suspended corporation. Revenue & Taxation Code section 23305.

Re: Corporate

1. No, can't do anything.

2. Yes, if the lawyer knows.