“FTB Suspended,” “SOS Suspended,” or Both: What Your California Business Status Means

How a company becomes SOS Suspended

Missing a Statement of Information does not suspend a company right away. The law has two steps, and the first one is a penalty.

Step one is the penalty. For an LLC, the Secretary of State sends a delinquency notice, and if the statement is still missing 60 days later, it certifies the LLC to the Franchise Tax Board (Corporations Code Section 17713.09). Revenue and Taxation Code Section 19141 then says the FTB “shall assess a penalty of two hundred fifty dollars ($250).” Corporations follow the same pattern under Corporations Code Section 2204.

Step two is suspension, and it applies in narrower cases. Section 17713.10 applies when an LLC has failed to file a required statement, has filed no statement in the preceding 24 months, and has already been certified for a penalty for that period. In that case the Secretary of State notifies the LLC “that its powers, rights, and privileges will be suspended after 60 days if it fails to file a statement.” The statute says the LLC is then subject to suspension “rather than to penalty.” Corporations Code Section 2205 sets out the same structure for corporations.

An LLC files a Statement of Information every two years, so a single missed filing can leave a gap of more than 24 months. Do not assume you will get several penalty cycles before a suspension notice.

How a company becomes FTB Suspended

The FTB suspends a company for tax reasons, and the rules are in Article 7 of the Corporation Tax Law (Revenue and Taxation Code Sections 23301 to 23311), titled “Suspension and Revivor.”

Section 23301 covers unpaid amounts. It applies when tax, penalties, or interest due on a return “is not paid on or before 6 p.m. on the last day of the 12th month after the close of the taxable year,” with an 11-month window, counted from the due date, for amounts due after a notice and demand. Section 23301.5 covers a company that “fails to file a tax return required by this part.”

These sections speak of a “taxpayer,” and Section 23305.5 defines that word for the article to include a business entity the law describes as a limited liability company. So the same suspension rules reach LLCs, whose annual tax and fee are set by Sections 17941 and 17942.

There is a notice before the suspension. Section 21020 says a taxpayer “shall not be suspended pursuant to Section 23301, 23301.5, or 23775 unless the board has mailed a notice preliminary to suspension,” and that the notice “shall be mailed to the taxpayer at least 60 days before the date certain.”

What the FTB says a suspended business cannot do

The FTB’s page for suspended businesses lists what a suspended business cannot do. It says you cannot:

• Legally do business
• Sell, transfer, or exchange real property
• File with an automatic extension
• Be issued a refund
• Start or continue a protest
• Legally close or dissolve your business
• Bring an action or defend your business in court
• File or maintain an appeal before the Office of Tax Appeals
• Maintain the right to use your business name
• Retain tax-exempt status

Contracts are affected too. Section 23304.1 says every contract made in California by a taxpayer while its powers are suspended or forfeited under Section 23301, 23301.5, or 23775 “shall, subject to Section 23304.5, be voidable at the request of any party to the contract other than the taxpayer.” Section 23304.5 limits how that works: it has to be raised in a lawsuit, and the company gets a chance to cure. The FTB’s page adds that a corporation suspended by the Secretary of State only is not subject to contract voidability.

There is an optional way to ask for relief from voidability for contracts made during the suspension. Section 23305.1 sets it up, and the FTB’s page says it “is optional and costs $100 per day,” and that “the maximum cost cannot exceed the tax due for the relief period.” For corporations, there is also a criminal statute: Section 19719 makes it a crime to exercise the powers of a corporation suspended under Section 23301, punishable by a fine of $250 to $1,000, up to one year of imprisonment, or both. That section is written in terms of corporations, so ask a California attorney how it applies to an LLC.

Suspension does not resolve itself, and it can lead to cancellation. Corporations Code Section 17713.10.1 says a domestic LLC that has been suspended by the FTB for at least 60 continuous months may be subject to administrative cancellation, with a notice and a 60-day window to object.

How to fix it, and in what order

Which steps you take depends on which agency is named in the status.

The Secretary of State’s FAQ spells out the order for a company suspended by both: “First file a current Statement of Information online at bizfileOnline.sos.ca.gov, and/or reimburse the VCFCF, and obtain a Secretary of State Proposed Relief Letter from suspension or forfeiture.” The company then sends Form FTB 3557 with a copy of that letter to the FTB. The FAQ adds that the entity “will remain suspended by the Secretary of State until both the Secretary of State and Franchise Tax Board revivor requirements have been met.” The FTB’s page says the same from its side: “Your business must be in good standing with the Secretary of State (SOS) to revive your business entity.”

Filing that Statement of Information online now takes an extra step. Since August 1, 2026, bizfile Online requires User Access to the entity’s record, and if nobody has it, the access PIN comes by mail. Our guide to the bizfile “Request Pin” letter covers how that works and what to do if the mailing address on file is old.

Check the name before you count on keeping it. Section 23305a says the Secretary of State checks whether the name is still available before revivor, and the FTB’s page says that if another business is using it, the Secretary of State will require your business to choose a new name.

Plan for the tax bill. The FTB’s page says business entities registered with the Secretary of State must file and pay “at least $800 franchise or annual tax from their registration date to current, regardless of business activity.” Our guide to the California $800 franchise tax and Statement of Information covers the yearly amounts.

Why the warnings can miss you

Both suspensions are preceded by mail. Whether that mail reaches you depends on the address each agency has on file.

For the Secretary of State’s regular Statement of Information reminder, the law names the address. Corporations Code Section 17702.09(c) says the notice “shall be sent to the last mailing address of the limited liability company or foreign limited liability company according to the records of the Secretary of State,” or, if none, to the principal office, or by email if the company opted in to email notices. The same subsection says failing to receive the notice “shall not exempt” the LLC from filing. Section 1502(d) has a similar rule for corporations, sending the notice to the corporation’s last address on the Secretary of State’s records.

The statutes for the delinquency notice, the suspension notice, and the FTB’s notice preliminary to suspension do not name an address in their text. For FTB notices more generally, Section 18416 says a notice is sufficient if mailed to the taxpayer’s last known address, and that this is the address on the last return filed with the FTB unless the taxpayer gave notice of a different one or the FTB has an address it has reason to believe is more current. That rule is written for a different part of the code than the suspension notice, so we do not treat it as the rule for the suspension notice itself.

The practical point is that California keeps two address records for your company. The Secretary of State’s comes from the Statement of Information. The FTB says its own mailing address can be changed with Form FTB 3533-B, through MyFTB, or by phone at 800-852-5711. Updating one is a separate step from updating the other.

A business address that receives and shows you your mail can help notices sent to either record reach you, but only if you list it on both records yourself and check the mail. It does not stop a suspension if the filings and payments are still missing. Our free address checker shows how an address is classified before you list it with either agency.