Top Reasons the FTB Suspends Businesses—and How a CPA Can Help Fix It

Did you know that thousands of California businesses get suspended every year by the Franchise Tax Board (FTB)? Being suspended can stop your business from operating legally, opening bank accounts, or even signing contracts. Understanding why this happens and how a CPA can help can save you a lot of stress.

1. Not Filing Tax Returns on Time

One of the main reasons a business is FTB suspended in CA is failing to file tax returns. The FTB expects businesses to submit their returns on time. If you miss deadlines, it can trigger penalties and suspension.

1. Owing Taxes or Penalties

Unpaid taxes, fees, or interest can also lead to suspension. Even small amounts can add up over time. If your business doesn’t settle these balances, the FTB can halt your operations.

1. Skipping the Minimum Franchise Tax

All registered businesses in California must pay a minimum franchise tax, even if the business isn’t active. Missing this payment can lead to suspension.

1. Not Filing with the Secretary of State

Corporations and LLCs must file a Statement of Information with the Secretary of State. Failing to do this can cause suspension from both the SOS and the FTB.

If your business is suspended, a CPA can guide you step by step to get back on track.

1. Check What’s Wrong

A CPA will review your records to find out why the FTB suspended your business. They check for missing returns, unpaid taxes, and any other problems.

1. File Past Tax Returns

If your business hasn’t filed all required returns, a CPA can prepare and submit them correctly. This is one of the first steps to lift the suspension.

1. Handle Payments

A CPA can calculate exactly how much you owe, including taxes, penalties, and interest, and help you make payments to the FTB.

1. Submit a Certificate of Revivor

To officially reinstate your business, the FTB requires a Certificate of Revivor. A CPA can fill out and submit this form to make sure it’s done right.

1. Stay Compliant with the SOS

Besides the FTB, your business also needs to follow SOS rules. A CPA can help file the Statement of Information and other documents, keeping your business in good standing.

For foreign-owned businesses, it’s important to work with a tax filing professional for foreign-owned LLCs. They understand the special tax rules for non-U.S. owners and can help avoid mistakes that lead to suspension.

Being FTB suspended in CA can be stressful, but it’s not the end of the road. A CPA can help you fix the problem, make payments, file missing returns, and get your business running legally again. If your business faces suspension, getting professional help early can save you time, money, and headaches.