Consequences of Failing to File a Statement of Information
California requires almost all corporations and LLCs to file a Statement of Information form every two years. This document keeps the Secretary of State’s Office up to date on the organization’s address, registered agent, and management team. Failing to file a statement of information in California can have penalties.
There are four main types of Statement of Information forms in California. They are:
- Form LLC-12: For LLCs that have had changes to their information since their most recent filing
- Form LLC-12NC: For LLCs that have not had any changes to their information since their most recent filing
- Form SI-550: For California stock or agricultural cooperatives and registered foreign corporations that have had changes to their information since their most recent filing
- Form SI-550 NC: For California stock or agricultural cooperatives and registered foreign corporations that have not had changes to their information since their most recent filing
Organizations that aren’t sure which document they must file can typically speak to a California compliance lawyer for advice or to have them file the form on their behalf.
Companies that fail to file their Statement of Information on time can face some severe punishments, including:
The California Franchise Tax Board (FTB) has the power to issue financial penalties to organizations that do not file their Statements of Information or submit their paperwork after the filing deadline has passed. The size of the fine depends on the nature of the entity:
- Foreign and Domestic LLCs: $250
- Foreign and Domestic For-Profit Corporations: $250
- Foreign and Domestic Nonprofit Corporations: $50
The California Secretary of State can waive these penalties under certain circumstances. Organizations who believe they may be eligible to receive a waiver can consult with a business attorney in San Diego to review their options.
Suspension and Forfeiture
LLCs and corporations who fail to file their Statements of Information can also face suspension and forfeiture. Should this nightmare scenario occur, the organization will no longer be able to:
- Sell its goods or services to the public
- Buy, sell, transfer, or exchange real estate
- Close or otherwise dissolve the business
- Take legal action against another organization
- Defend itself in a court of law
- Maintain the right to use its business name
- File a claim for a refund from the state
- Enter into a contract with another organization
- File or maintain an appeal with the California Office of Tax Appeals
Nonprofit corporations that do not file their Statements of Information in a timely manner may also lose their tax-exempt status should the FTB move to suspend them.
A California Compliance Lawyer You Can Count On
Do you need a skilled business attorney in San Diego to help you file your organization’s Statement of Information form with the California Secretary of State? If so, please do not hesitate to reach out to the team here at the Semanchik Law Group. We have been helping companies like yours avoid fines and suspensions for many years – and we are ready to do the same for you. To learn more about our services, all you need to do is give us a call at (619) 535-1811 or contact us online.