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What powers does a LLC have in California to legally operate…

What powers does a LLC...
What powers does a LLC have in California to legally operate if it Ceased Good Standing - This represents an entity that failed to pay their annual FTB taxes period. For example: 2002 to 2008 taxes due were never paid. In this case Taxes had never been paid to the FTB for the first 7-years. Then its members canceled it. So did this LLC have power to conduct business, and create and sign contracts with other entity's.
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Answered in 2 minutes by:
3/22/2018
Roy Hadavi
Category: Business Law
Satisfied Customers: 1,394
Experience: Attorney at Law Offices of Rosenstein & Associates
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Hi. My name is ***** ***** I am a licensed California attorney with extensive business law experience. I would be happy to provide assistance. Please keep in mind that our conversation does not include an attorney‑client relationship and this is for general information purposes only.

Answer: No, the LLC would not be authorized to conduct business if it was not in good standing. Instead, any obligation of the LLC (such as a contract) would be considered the personal liability of the members (those who own an interest in the LLC) of the LLC.

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Customer reply replied 4 months ago
this LLC could not be a plaintiff in any Civil law suit that pertains to the enforcement of a contract.

The proper named party would be the individual members. However, if someone is suing the LLC, it would not be in the interest of the members to argue this, because that would open them up to personal liability.

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Customer reply replied 4 months ago
No this LLC is the Plaintiff suing another LLC, is this a lawful action?

Thank you for clarifying. No, the LLC cannot pursue an action against another party and cannot enforce a contract.

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Customer reply replied 4 months ago
Is there any rules, or case law, etc. that I can use to support your answer ?

You can click here to view an article that explains the matter.

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Customer reply replied 4 months ago
The LLC was never Suspended, and it never had any recorded members or officer with the state? But it was singing contracts and filing law suites.
Customer reply replied 4 months ago
The LLC was never Suspended, and it never had any recorded members or officer with the state? But it was signing contracts and filing law suites.
Customer reply replied 4 months ago
No I do not want you to referr, you are doing a good job, You said "No, the LLC cannot pursue an action against another party and cannot enforce a contract." I just need you to give me some case law or rule that confirms what been said so I can use it when needed.
Customer reply replied 4 months ago
Are you back, I just need you to give me some case law or rule that confirms that this LLC is not operate legally.
RayAnswers
RayAnswers, Attorney
Category: Business Law
Satisfied Customers: 48,265
Experience: I have 30 years as a business lawyer in Texas
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Here the Secretary of State talks about suspension and cannot conduct business until reinstated.

http://www.sos.ca.gov/business-programs/business-entities/faqs/

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A suspended corporation may not prosecute or defend an action in a California court.
A corporation may be suspended for at least one of the following reasons:

  • Failure to file one or more tax returns. Cal Rev. & Tax Code Sec. 23301.
  • Failure to pay the business' tax balance due. This can include the penalty for failing to file the annual Statement of Information with the Secretary of State. California Corporations Code Section 2205.

Timberline, Inc. v. Jaisinghani, (1997) 54 Cal. App. 4th 1361.(Stating a suspended corporation is disqualified from exercising any right, power, or privilege, including prosecuting or defending an action, or appealing a judgment).

A suspended corporation may not prosecute or defend an action in a California court. (Ransome-Crummey Co. v. Superior Court [54 Cal.App.4th 1366] (1922) 188 Cal. 393, 396-397 [205 P. 446]; Alhambra-Shumway Mines, Inc. v. Alhambra Gold Mine Corp. (1957) 155 Cal.App.2d 46, 50-51 [317 P.2d 649].)

Nor may a suspended corporation appeal from an adverse judgment (Boyle v. Lakeview Creamery Co. (1937) 9 Cal.2d 16, 20-21 [68 P.2d 968]; Gar-Lo, Inc. v. Prudential Sav. & Loan Assn. (1974) 41 Cal.App.3d 242, 245 [116 Cal.Rptr. 389]), or seek a writ of mandate (Brown v. Superior Court (1966) 242 Cal.App.2d 519, 635 [51 Cal.Rptr. 633]).

However, if the corporation's status only comes to light during litigation, the normal practice is for the trial court to permit a short continuance to enable the suspended corporation to effect reinstatement (by paying back taxes, interest and penalties) to defend itself in court. (See, e.g., Schwartz v. Magyar House, Inc. (1959) 168 Cal.App.2d 182, 190 [335 P.2d 487].)

In a number of situations the revival of corporate powers by the payment of delinquent taxes has been held to validate otherwise invalid prior action. (Traub Co. v. Coffee Break Service, Inc. [(1967)] 66 Cal.2d 368, 370 [57 Cal.Rptr. 846, 425 P.2d 790]; Diverco Constructors, Inc. v. Wilstein [(1970)] 4 Cal.App.3d 6, 12 [85 Cal.Rptr. 851]; A. E. Cook Co. v. K S Racing Enterprises, Inc. [(1969)] 274 Cal.App.2d 499, 500 [79 Cal.Rptr. 123]; Duncan v. Sunset Agricultural Minerals [(1969)] 273 Cal.App.2d 489, 493 [78 Cal.Rptr. 339].)

In all of the above cited cases it was held that the purpose of section 23301 of the Revenue and Taxation Code is to put pressure on the delinquent corporation to pay its taxes, and that purpose is satisfied by a rule which views a corporation's tax delinquencies, after correction, as mere irregularities. This reasoning is in accord with the language in Boyle v. Lakeview Creamery Co., 9 Cal.2d 16, declaring the legislative policy of Revenue and Taxation Code provisions imposing sanctions for failure to pay taxes to be 'clearly to prohibit the delinquent corporation from enjoying the ordinary privileges of a going concern, in order that some pressure will be brought to bear to force the payment of taxes.' (At p. 19.) There is little purpose in imposing additional penalties after the taxes have been paid." (Peacock Hill Assn. v. Peacock Lagoon Constr. Co. (1972) 8 Cal.3d 369, 371 [105 Cal.Rptr. 29, 503 P.2d 285], corporation which was suspended after judgment for nonpayment of franchise taxes was entitled to pursue its appeal after it paid the delinquent tax, interest and penalties and received its certificate of revivor.)

Thanks again and thanks for rating 5 stars.

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Customer reply replied 4 months ago
Know if this LLC was never completly formed, no operating agreement, no members, managers, never paid the $800 FTB annual fees for over 7 years, no business licences, and it had not been suspended. What laws or rules or case laws, say this LLC can not sign contracts in it name or bring a action in civil court against two defendants for quit title.

The LLC was never legal here according to the Secretary of State they cannot do anything .See the reference above.

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You could file motion to dismiss using these cases..

Nor may a suspended corporation appeal from an adverse judgment (Boyle v. Lakeview Creamery Co. (1937) 9 Cal.2d 16, 20-21 [68 P.2d 968]; Gar-Lo, Inc. v. Prudential Sav. & Loan Assn. (1974) 41 Cal.App.3d 242, 245 [116 Cal.Rptr. 389]), or seek a writ of mandate (Brown v. Superior Court (1966) 242 Cal.App.2d 519, 635 [51 Cal.Rptr. 633]).

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Customer reply replied 4 months ago
Know if this LLC started the organizing process registering the name and was never completely formed, and had not been suspended, had no operating agreement, no members, managers, never paid the $800 FTB annual fees for over 7 years, no business licences, and it had not been suspended. What laws or rules or case laws, say this LLC can not sign contracts in it name or bring a action in civil court in it name against two defendants for quit title.

The case above is analogous, they weren't legal to operate.Your case is unique here, not a lot of case, most LLCs set up legal and then go bad here they were bad from the starts.These cases would support you here arguing the LLC could not legally do anything.

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