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Before the certificate of revivor is issued by the
Franchise Tax Board, it shall obtain from the secretary
of state an endorsement upon the application of the
fact that the name of the taxpayer then meets the
requirements of subdivision (b) of Section 201 of the
Corporations Code [rules concerning clearance of
corporate name] in the case of a domestic taxpayer * *
*. Upon the issuance of the certificate by the
Franchise Tax Board the taxpayer therein named shall
become reinstated but the reinstatement shall be
without prejudice to any action, defense or right which
has accrued by reason of the original suspension or
forfeiture * * *. The certificate of revivor shall be
prima facie evidence of the reinstatement and the
certificate may be recorded in the office of the county
recorder of any county of this state. [Cal. Rev. & Tax.
Code sec. 23305a (West 1992).]
The Supreme Court of California construes Cal. Rev. & Tax.
Code secs. 23301 and 23302 (West 1992 & Supp. 1999) to mean that
a corporation may not prosecute or defend an action during the
period that it is suspended for failure to pay taxes. See United
States v. 2.61 Acres of Land, 791 F.2d 666 (9th Cir. 1985); Reed
v. Norman, 309 P.2d 809 (Cal. 1957), and the cases cited therein;
see also Grell v. Laci Le Beau Corp., 73 Cal. App. 4th 1300, 1306
(1999) (unless one of the exceptions set forth in Cal. Rev. &
Tax. Code sec. 23301 (West Supp. 1999) applies, a “suspended
corporation is ‘disqualified’ from exercising any right, power or
privilege.”). The purpose of that rule, the Supreme Court of
California has stated, is 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
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Last modified: May 25, 2011