What is the difference between a canceling or dissolving LLC.

Dissolution (and winding up) of a limited liability company is the process that the LLC goes through to get ready for termination of its existence (i.e., cancellation by the Secretary of State).

Cancellation is the process that the Secretary of State goes through that results in termination of the LLC's powers, rights, and privileges after the LLC has gone through dissolution and winding up of its affairs.

Put another way, dissolution and cancellation are the two steps that must be taken, by two different entities, for an LLC's existence to end. While both steps are required, they are not the same thing (if they were, two different terms probably would not be used).

See, e.g., the statutes at the link provided below.

This information does not constitute legal advice and does not establish an attorney-client relationship.

Essentially it is a question of semantics, for in practice, they mean the same thing. It is simply a matter of what procedure would follow to effectuate the end of the LLC as a live, actively-registered entity, depending on who is doing the "canceling" or "dissolving" --the sole member or members by consent, or the state agency overseeing corporate registration in the relevant jurisdiction. My versatile and learned California colleague, Attorney Michael Doland, has carefully outlined certain forms and procedures, which you would be well advised to consult. Best wishes to you.

The two terms mean essentially the same thing. If all the LLC members agree to dissolve, instead of filing certification dissolution, it can file a certificate of cancellation. Make sure that the dissolution/cancellation are done in accordance with the terms in the operating agreement. Attached are links to both Secretary of State and the Franchise Tax Board. There are forms that needed to be filed to both departments.

Unless you are a client of Yuan Law Firm, APC, under a current and signed representation agreement, you should not rely upon any information provided in this Q&A as legal advice. There is no attorney-client relationship between you and the attorney or the law firm. Circular 230 Advice: Pursuant to U.S. Treasury Department Regulations, we are required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

From the Secretary of State web site

California Limited Liability Company: File a Certificate of Dissolution (Form LLC–3) and Certificate of Cancellation (Form LLC–4/7), unless all the members vote to dissolve, in which case only Form LLC–4/7 is required; OR, in limited circumstances, a Short Form Certificate of Cancellation (Form LLC–4/8) may be filed.

Foreign Limited Liability Company: File a Certificate of Cancellation (Form LLC–4/7).
California or Foreign Limited Partnership: File a Certificate of Cancellation (Form LP–4/7).

Do not forget to file a final tax return with the IRS and FTB

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.