CA LLC sold 2004. Forms not filed with state. FTB states franchise tax fees owed for all those years. What are our options?

Asked about 1 year ago - Oxnard, CA

Broker and/or title company did not file the closing forms with state and we no longer have the records of sale as so much time has passed. FTB is looking to collect $800 + penalties and late fees for the past 8 years. This is the first time that we received letters from them... Why did FTB not approach us in 2005 or 2006? Can they wait that long???? What can we do? We filed the required "zero" returns as requested but they still want payment. Do we have options?

Attorney answers (4)

  1. Bruce Givner

    Contributor Level 19

    3

    Lawyers agree

    Best Answer
    chosen by asker

    Answered . As Mr. Doland has pointed out, the minimum franchise taxes are owed by the LLC, not by you personally. So if the fees are not paid, the entity is supended. You do not have a personal liability. So your option is to not use the entity and let it "die."

  2. Pamela Koslyn

    Contributor Level 20

    4

    Lawyers agree

    Answered . The 1st place to look is your sale documents. and if you didn't save copies,see if you can get them from the broker or title company. It sounds like this was a real estate deal if there was a "broker and/or title company" involved, and your RE agents would have owed you "fiduciary duties in this transaction, so you may have a cause of action for indemnity against them if they performed negligently.

    Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to... more
  3. Michael Charles Doland

    Contributor Level 20

    3

    Lawyers agree

    Answered . If you sold the LLC in 2004, you can pass the FTB letters on to the new owners.
    If you bought the LLC in 2004 and are the owner(s), then you can either pay the minimum annual FTB fee or if the company has no assets or activity, you can allow it to become suspended. The tax is owed by the entity, not the owners.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more
  4. John P Corrigan

    Contributor Level 19

    2

    Lawyers agree

    Answered . Let's be clear here -- did you sell the LLC or did the LLC sell it's business assets? The answer to this question makes a big difference.....so please put forward additional facts.

    My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a... more

Related Topics

Small business LLCs

An LLC (limited liability company) is a business entity that has elements of both a corporation and a partnership (or sole proprietorship).

Small business taxes

Small business taxes include state and federal income taxes and employment taxes, self-employment taxes, and excise taxes.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

19,774 answers this week

2,504 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

19,774 answers this week

2,504 attorneys answering