Legal Question in Business Law in California

failure to file officer statement for C corp

I had entered into a business with a partner who said he had an existing corp. I was to be Vice president of Corp and he advised that he had sent the paper work to the Sec of State. Come to find out that he has never filed the required paper work '' officer statement'' and the sec of state if going to suspend the corp for failure to do so. I was under the impression that I was 50 % owner to this company per our orginal verbal agreement. I also found out that I was only an equal signer on the checking account never an owner. Since he failed to file the required paper work does he have the protection of the corp? We have since stopped out business relationship and I have went on my own way . He is now depanding that I supply him with all paper work and invoices that I have worked on. When I joined business with him he had only 2 clients. I did 99.9% of all work for the company and have increased the amount of clients to more then 20. Where do I stand with his demands. Since we were never really C Corp. Would we be condsider a partnership. I need to know should I retain an attorney since he thinks he owns everything and keeps making demands.

Thank you for your time.


Asked on 11/12/05, 6:37 pm

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: failure to file officer statement for C corp

The statement of officers, etc. needs to be filed shortly after the corporation is formed, and then again annually. Failure to file will, eventually, result in the corporation being suspended. However, filing with payment of the late-filing fee is so easy and cheap this should never be a significant issue for a corporation that opens and reads its mail and is paying even the slightest attention to business.

Failure to file, and the eventual suspension, doesn't, however, mean that the corporation never existed. You can go to the Sec. of State Web site at www.ss.ca.gov and look up this corporation to see whether it was duly formed, and what its current status is.

All of this points up the facts that business cannot be conducted with heads in the sand. There is a lot more to a widget business than making and selling widgets. There are rules to follow, forms to fill out, reports to file, accounts to establish, and taxes to pay. People who go into business together need agreements! They need to be in writing!

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Answered on 11/13/05, 2:28 am
H.M. Torrey The Law Offices of H.M. Torrey

Re: failure to file officer statement for C corp

If the failure to file was intentional, rather than simply improper according to procedure, then the corporation never existed. However, if there is a listing with the sec. of state, and/or the paperwork was just filed erroneously, then a de facto corporation may still exist, even if it is not de jure. You should DEFINITELY retain an attorney ASAP to review your facts, paperwork, etc..and/or ultimately represent you in negotiations or a lawsuit before it becomes too late. If you would such assistance, contact us directly.

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Answered on 11/13/05, 3:33 am


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