Legal Question in Business Law in California

Re: What is the legal effect of an inactive corporation

Neither of these terms is familiar to me in the context of a California corporation. I've looked at corporate status information for hundreds of corporations, and do not recall ever seeing one reported as inactive or term expired. The usual status descriptions are active, suspended, dissolved, and merged out. Occasionally, surrender and forfeited show up.

The term inactive could be applied to nonprofit corporations which have conducted no business for at least five years, and thus are eligible to dissolve without membership approval. I do not find any other reference to inactivity in the Corporations Code.

"Term expired" probably refers to a corporation formed for a definite life (rather than having perpetual existence, as most do) and where the date of expiration has passed.

Based on the foregoing, I would say that an inactive corporation probably can conduct business, but when it does, it comes out of inactive status.

I would say that a "term expired" corporation no longer exists and cannot transact any business.

Since both of these terms are somewhat unusual, to say the least, in describing the status of a California corporation, I wonder if these terms are borrowed from the useage in another state. In any event, my answers are best guesses and should not be relied upon as certain.

If you have more facts, such as where you saw these terms used, maybe I could give you a better answer.