Suspension, Revocation, and Forfeiture of Corporate and Exempt Status

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Suspension, Revocation, And Forfeiture Of Corporate And Exempt Status of a Nonprofit In California

Don't Risk Losing Your Corporate Standing And Tax-Exempt Privileges

Suspension, revocation, and forfeiture of corporate and exempt status for nonprofit organizations is a complex process that requires careful consideration and detailed research. The process varies depending on the type of organization, its size, and the specific circumstances surrounding its dissolution or suspension. Generally speaking, when an organization's governing documents or activities no longer meet applicable laws or regulations, it may be subject to suspension, revocation, or forfeiture of its corporate and/or tax-exempt status.

Contact Daryl Reese Law Group to schedule a consultation with a lawyer today. 707-858-5000

Ensure your nonprofit stays in compliance with legal requirements

The corporate powers, rights, and privileges of an exempt nonprofit corporation may be forfeited or suspended (except amending its articles of incorporation to change its name), and its exempt status may be revoked, if it fails to file a required information return or unrelated business income tax return, or pay tax that is due, on or before the last day of the 12th month following the close its taxable year. Rev & T C §§23775, 23777(a).


For corporations granted nonprofit status under state law (such as in most US states), they can be suspended due to failure to file annual reports with the Secretary of State's office. If the corporation fails to pay any taxes owed or comply with other legal requirements imposed on nonprofits in the state, then their corporate status may be revoked or forfeited by court order. 

We Can Help You

Nonprofits should ensure they are aware of all applicable laws and regulations governing them so they can remain compliant at all times — otherwise they risk losing both their corporate standing and tax-exempt privileges if deemed necessary by regulators. A qualified attorney experienced in non-profit law can help answer any questions regarding suspension, revocation, or forfeiture procedures related to a particular organization’s situation so they can make informed decisions about how best proceed going forward.

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