To dissolve a California corporation or LLC that you no longer need, all tax returns must be filed, all taxes must be paid, corporate governance and creditor issues must be addressed, and the appropriate filings must be made with the California Secretary of State. Other state and local agencies may also need to be notified. The dissolution process may be commenced before all of these steps are complete, and our dissolution service includes advice on complying with all of the requirements.
It is not necessary for the shareholders or members to personally guarantee the tax liability of the corporation or limited liability company, but the California Secretary of State will not make final the dissolution of any entity until the tax authorities are satisfied all tax obligations have been fulfilled.
Failure to dissolve an inactive California corporation or LLC will result in the assessment by the Franchise Tax Board of the annual minimum franchise tax of $800. California law does not provide for an unused corporation or LLC to go on an inactive status.
Foreign (out-of-state) corporations and LLCs who will no longer be doing business in California should also consider terminating their foreign corporation or foreign LLC registration with the Secretary of State, a process similar to dissolving a domestic (California) business entity. Registered foreign corporations and LLC are subject to the same tax, reporting, and maintenance requirements as domestic corporations and LLCs.
For dissolution of limited liability partnerships, limited partnerships, and general partnerships, please contact the firm. For additional information and fees for California corporation and California LLC dissolutions, please see these pages: