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CA LLC laws, what is the procedure for dissolving the LLC

Asked about 3 years ago - Murrieta, CA

I formed an LLC this year for a business my wife and I started. We never paid the $800 fee to the Franchise Tax Board. Now we want to dissolve the LLC. Since we never paid the fee for the LLC, what do we need to do to dissolve the LLC?

Thanks..........Jim

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Attorney answers (3)

Mitchell Allan Port

Reputation Level 10

Answered about 3 years ago. Probate Attorney in Los Angeles, CA.

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Generally, LLCs are required to obtain a Tax Clearance Certificate from the Franchise Tax Board (FTB) before the Secretary of State (SOS) is allowed to file an LLC "Certificate of Cancellation". LLCs complete Form 3555L, "Request for Tax Clearance Certificate LLC or LLP", according to instructions contained in Publication 1038L, "Instructions for Limited Liability Companies or Limited Liability Partnerships Requesting a Tax Clearance Certificate". After receiving Form 3555L, the Tax Clearance Unit requires that an LLC file all required returns and pay all amounts due before issuing a Tax Clearance certificate. After the FTB sends the Tax Clearance Certificate to the SOS, the SOS files an LLC Certificate of Cancellation.

To dissolve the LLC, you must complete the form LLC-3 which you can find at this link: http://www.sos.ca.gov/business/llc/forms/llc-3_...

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Matthew J. Abraham

Reputation Level 7

Answered over 2 years ago. Limited Liability Company (LLC) Lawyer in Fenton, MI.

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In addition to the information attorney Port provided, the State of California, Franchise Tax Board provides detailed instructions for dissolving, surrendering or canceling a CA business entity. The link to this publication can be found here:
http://www.ftb.ca.gov/forms/misc/1038.pdf

You should consult with a qualified attorney to discuss the legal impact of the dissolution of your LLC.

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Mitchell Allan Port

Reputation Level 10

Answered about 3 years ago. Probate Attorney in Los Angeles, CA.

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Jim,

A domestic limited liability company must file a Certificate of Dissolution (Form LLC-3) and a Certificate of Cancellation (Form LLC-4/7), unless all the members vote to dissolve, in which case only the Certificate of Cancellation is required; OR, in limited circumstances, a Short Form Certificate of Cancellation (Form LLC-4/8) may be filed. In addition, certain franchise tax requirements must be met.

A registered foreign limited liability company must file a Certificate of Cancellation (Form LLC-4/7). In addition, certain franchise tax requirements must be met.

Please refer to Forms LLC-3, LLC-4/7 and LLC-4/8 for filing information and instructions.

The LLC will be taxed at the corporate tax rate of 8.84 percent and will be subject to a minimum tax of $800.
An LLC pays an annual tax of $800 and may be subject to a fee based on the LLC's total income from all sources derived from or attributable to the state of California. The annual tax is due by the 15th day of the fourth month of the taxable year, and is paid using CA Form 3522.

Ann LLC is not subject to the annual tax if BOTH of the following is true: (i) it did not conduct any business in California during the taxable year and (ii) the taxable year was 15 days or less.

Hope this helps. Mitchll Port, Esq.

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