Legal Question in Business Law in California

How is a Florida non-profit company affected by doing buisiness with a vendor that has a suspended corporate status (Calif corp.)?


Asked on 8/26/09, 8:30 am

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Very likely not at all; however, suspended corporations frequently are very short of money, poorly managed, or both. The suspension usually results from failure to report and pay California corporate franchise and income taxes, or failure to file a biennial one-page statement of officers and directors. Therefore, I'd be a bit careful about depending on one, or advancing it large sums of money. I would also avoid significant multi-party contracts with a suspended corporation, since the suspended corporation cannot enforce it's end of the bargain and a third party might rescind and harm you in doing so. Don't partner or joint venture with one. However, routine business dealings like purchasing supplies will probably be fine, just don't sole-source or prepay.

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Answered on 8/26/09, 12:00 pm


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