Lapsed HOA Incorporation

Started by JanieG • 2 replies • 1448 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

JanieG (California)
Posts: 2

Posted:

Two and a half years ago our new president informed us that it appeared that the developers of our 12 units had incorporated (developers went broke and no followup occurred). There is no institutional memory, no records in conjunction with the state, only Bylaws and Declaration of Restrictions.

Members have spent this time trying to learn (on the cheap) how to become incorporated and in good standing with the state. The person given responsibility learned that we have a number with the state.

Everyone seems to be paralyzed with fear that we are going to be paying taxes and penalties for the past 28+ years.

One suggests that we rename and file as a new entity. Is this viable?

GlenL (Ohio)
Posts: 5,491

Posted:

Janie I'm not an attorney but I would suggest you contact the CA Secretary of State's Office and find out what it would require to reactivate the Corp. Often it requires filling out a form and paying the past due corporate fees. There generally isn't a lot of taxable income for a COA to pay unless you have massive reserves and receive a lot of interest on the money. As to forming a different Corp, that may or may not be possible but you should consult an attorney beforehand.

Studies show that 5 out of 4 people have problems with fractions

TimB4 (Tennessee)
Posts: 21,061

Posted:

Glen offers excellent advice.

Regardless if you were incorporated or not, taxes should have been filed. If you haven't filed them for the last 28 years, you either need to start filing now and hope the IRS doesn't check for past returns or file the past returns.

BTW - you needed an EIC (employer identification number) when you opened the bank account in the Associations name. The EIC is what the IRS would use, not the corporation status.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here