diff --git a/crud.py b/crud.py
index a403924..7423c3c 100644
--- a/crud.py
+++ b/crud.py
@@ -920,9 +920,23 @@ async def get_all_equity_eligible_users() -> list["UserEquityStatus"]:
 async def create_account_permission(
     data: "CreateAccountPermission", granted_by: str
 ) -> "AccountPermission":
-    """Create a new account permission"""
+    """
+    Create a new account permission.
+
+    Raises:
+        ValueError: If account is inactive or doesn't exist
+    """
     from .models import AccountPermission
 
+    # Validate account exists and is active
+    account = await get_account(data.account_id)
+    if not account:
+        raise ValueError(f"Account {data.account_id} not found")
+    if not account.is_active:
+        raise ValueError(
+            f"Cannot grant permission on inactive account: {account.name}"
+        )
+
     permission_id = urlsafe_short_hash()
     permission = AccountPermission(
         id=permission_id,