Failure to file tax returns (Rev. & Tax Code §23301).
Failure to pay taxes (Rev. & Tax Code §§23301.5, §23775).
Failure to file a "Statement by Domestic Nonprofit Corporation" with the Secretary of State. (Corp. Code §2205.)
Failure to file a "Statement by Common Interest Association" with the Secretary of State. (Corp. Code §2205.)
Corporate Name. Could lose its corporate name if someone reserves their name during the suspension period;
Litigation. Cannot initiate lawsuits or defend itself against
lawsuits. Attorneys who engage in litigation for an association knowing it has been suspended can be sanctioned by the courts. (Palm Valley HOA v. Design MTC.);
Contracts. Loses the right to enforce contracts (any contract executed by a suspended association is voidable at the demand of the other party; Rev. & Tax Code §23304.5). ; and
Tax Returns. Loses the right to get an extension to file tax returns.
Duty to Pay Bills. Being suspended does not mean an association is relieved of its obligations. Even though suspended, boards should continue to make repairs and pay bills while the association goes through the revivor process.
Additional Taxes. In 2013 the Franchise Tax Board (FTB) began revoking the exempt status of a corporation once the entity is suspended. If the revocation occurs for a past tax year the FTB will impose the annual minimum tax of $800 per year plus penalties and interest. To revive the entity, the association must file a new exemption application (Form FTB3500) with the Exempt Organization Unit of the FTB. The application which used to be five pages is now twenty-five pages. Along with the application you must file a copy of the endorsed articles of incorporation, executed bylaws, recorded CC&Rs and it requires five years of HOA financial information.
Loss of Name. If an association loses its corporate name while suspended, it can no longer simply file a form with a new name. The Secretary of State now requires membership approval. That means further delays and additional expenses holding an election before the corporation can be revived.