California pressures corporations to pay their taxes by suspending their corporate powers, rights and privileges when they fail to do so.   Cal. Rev. & Tax Code § 23301.  Consequently a suspended corporation may not litigate.   Welco Constr., Inc. v. Modulux, Inc., 47 Cal. App. 3d 69, 71, 120 Cal. Rptr. 572 (1975).   

Suspension, however, is not the final word because a corporation can pay its taxes and then apply with the Franchise Tax Board for reinstatement. Cal. Rev. & Tax Code § 23305.  Assuming the corporation meets the applicable statutory requirements, the Franchise Tax Board issues a "certificate of revivor."  Id.  "Upon the issuance of the certificate [of revivor] 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 . . . ."  Cal. Rev. & Tax Code § 23305a.

What happens when a suspended corporation files a notice of removal and is thereafter revised?  According to U.S. District Court Judge John A. Houston, the answer depends upon whether the action is considered substantive or procedural.  Jimenez v. CRC Prop. Mgmt. West Inc., 2021 U.S. Dist. LEXIS 177618  Substantive actions are not validated by revival while procedural actions are.  Filing a notice of removal falls into the procedural category and are therefore validated by a suspended corporation's subsequent revival.

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