Legal Question in Business Law in California

Impact of doing business with a suspended ca corporation

We just discovered that One vendor that we are about to sign a contract with is a CA corporation and his corporation status is Suspended

What does it mean if we sign a contract with such a vendor.

Do we the client corporation, land in any trouble


Asked on 3/10/09, 11:49 pm

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

Re: Impact of doing business with a suspended ca corporation

A lawyer or law firm would get in trouble representing a suspended corporation in court. That's illegal. Otherwise, your main risk is that the suspended corporation you'd be dealing with is probably poorly managed and/or in very weak financial health. Your contract could be enforced by you, but probably not by the suspended corporation if you resisted its enforcement against you by brining a court action for rescission. That gives you a bit of an upper hand, but maybe not enought to offset the risk of depending on a flaky operation.

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Answered on 3/11/09, 1:10 am
Mark Russakow Russakow, Ryan and Johnson

Re: Impact of doing business with a suspended ca corporation

It means the corporation is not entitled to be afforded the protections of california law. You will not get in trouble, but I would have the officer of the corporation sign as an individual. Usually suspension happens when corps fail to pay the yearly fee. It can easily be fixed by paying the state the fee.

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Answered on 3/11/09, 12:41 pm
Terry A. Nelson Nelson & Lawless

Re: Impact of doing business with a suspended ca corporation

Only in collecting your money.

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Answered on 3/11/09, 2:19 pm


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