My business partner and I started an LLC in California in April of 2011. Shortly after he was transferred out of state for a new job. We never conducted business with the LLC. It really was a waste of time and money. He told me he would take care of dissolving the LLC with the SOS. As it turns out it was never done. Now I am afraid that since no tax returns were ever filed and I have read the Farnchise Tax Board charges $800 per year, that we are going to be so in debt we won't be able to afford to cancel. Is there a way to cancell our LLC without paying the fees. We are not planning on starting up the LLC again or selling it to anyone else... ever. What do I do?
In theory, you should pay the past-due amounts, plus interest and penalties, then dissolve the LLC.
However, every year countless people in your situation just walk away and never hear from the FTB, which lacks the staff to pursue matters that will not result in a large financial return for the State.
This information does not constitute legal advice and does not establish an attorney-client relationship.
I agree with Mr. Schultz and his realistic assessment. At the least, you should consider filing the necessary forms to dissolve the LLC. Here is the link for the necessary forms:
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LLCs are subject to an annual tax of $800 if they are doing business in California, or the California Secretary of State accepts their articles of organization or a certificate of registration. The annual tax is paid for the privilege of doing business in California even if the LLC did no business in California. An LLC is not subject to the tax if it did no business in California and the taxable year was 15 days or less.
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