Filed the article of incorporation (form LLC-1) 7yrs ago listing myself as one manager, but never did anything with the LLC; no funding, no operation agreement, no business. Essentially just abandoned the idea of going into business. FTB started sending notices 4 months ago asking for unfiled tax returns and unpaid franchise tax for the last 7yrs, before this I've never received a notice and didn't know the LLC was still active. Just received a notice that the LLC was suspended and the FTB will start the collection process. Do I file all taxes and pay the fees and penalties? Do I just ignore it? Will they come after me personally for not filing the LLC tax return form 568 and paying the $800 yearly tax since it would be a disregarded for tax purposes and levy my bank or lien my house?
If you don't plan on using this LLC to do business and don't plan on using the name of the LLC again, then there is nothing you should do. They will not come after you personally.
I am inclined to agree with my colleague, but I want to make a point.
It is my understanding that the state of CA absolutely reserves the right to collect these franchise taxes from principals. This is not to say that they will come after you and the safe bet is that the LLC will simply get administratively dissolved with no repercussions. But there are no jurisdictions I am aware of that make flat statements like "and if you don't pay your taxes we don't do anything about it."
If you have real concerns here, you may want to consult someone who works in this area a great deal like a CA CPA or tax attorney and get a sense as to whether you have any exposure. Again, I think my colleague is right, but I would not feel comfortable concluding that.
DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed with the law firm of Natoli-Lapin, LLC on the basis of this posting.
The debt is the debt of the entity, not of the owners.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
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