How To Erase A Business Entity's Cancellation

Allen Matkins

Allen Matkins

Sometimes people get confused and will file a certificate of cancellation or dissolution with the California Secretary of State when the entity has not dissolved, much less completely wound up its affairs.  The challenge then becomes how to resurrect an entity that is dead as far as the State of California is concerned.  Indeed, the Corporations Code provides no means for revivifying the entity.

The solution lies in Article 6, Chapter 3, Part 2, Division 3, Title 2 of the California Government Code, Cal. Gov't Code §§ 12260-12263.  Pursuant to these statutes, the Secretary of State is required to reinstate a business entity to active status in either of the following two circumstances:

  • The factual representations by a shareholder, member, partner, or other person that are contained in the termination document are materially false; or
  • The submission of the termination document to the Secretary of State for filing is fraudulent.

There is no point in trying to convince the Secretary of State of either of these facts.  The Secretary of State is required to reinstate the entity only if a court makes the finding.   There are two ways to to obtain the required court order:  (i) submitting a petition to the Superior Court containing the legal and factual basis for reinstatement; or (ii) as part of a civil action for damages or equitable relief.  Reinstatement is effective from the date of the filing of the court order with the Secretary of State.  Thus, it is possible that the cancelled entity could lose the ability to be reinstated under its name if another entity has made a supervening filing under the cancelled entity's name.

The word "cancel" is derived from the Latin word cancellus, which refers to grid or lattice.  Thus, cancellation involves blotting something with a lattice-work of lines.

YumaCancelli at the Yuma Territorial Prison

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins | Attorney Advertising

Written by:

Allen Matkins

Allen Matkins on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.