Dissolving a California LLC
If you and other members of your organization are considering dissolving your LLC, it's important to address the required steps; otherwise, you could face administrative consequences and additional challenges associated with the dissolution of your California LLC.
Before you file paperwork
Before anything is filed with the state to formally terminate the existence of the LLC, members of the LLC need to take certain actions. As a first step, members of the LLC need to approve the dissolution. This can be done in accordance with the operating agreement of the LLC or through a unanimous consent of the members approving the dissolution. Regardless of the method, the vote on the dissolution should be recorded in the minutes of the meeting in which it occurred. This can be helpful in the event that someone does not remember providing their consent.
What to file
You must file a certificate of dissolution with the Secretary of State. This administrative step is required to terminate the obligations owed by the LLC. However, if all LLC members vote to dissolve the LLC, the certificate of dissolution filing is not required so long as a statement to that effect is included with the certificate of cancellation.
The certificate of dissolution must include the LLC’s name, SOS file number, required signatures and a return mailing address. There is no fee to file the certificate of dissolution, however processing can take several weeks. We can expedite the service for an additional fee.
You will need to make arrangements to pay all LLC liabilities, debts and obligations. California does not require tax clearance to dissolve an LLC, however it must be addressed in your certificate of cancellation. The certificate of cancellation must include the LLC name, the SOS filing number, and information that the final tax return has been filed with the Franchise Tax Board. The certificate of cancellation form, including instructions, is available for download from the SOS website. Your certificate of cancellation should be filed within 12 months of filing your final tax return. There is no fee to file the certificate of cancellation, however processing can take several weeks. We can expedite the service for an additional fee.
We recognize that this process can be overwhelming and frustrating for someone in the midst of winding down the business of an LLC. To avoid the hassles associated, you can partner with our service and we will handle all aspects of dissolving your California LLC for you.
Impact of dissolution
Once formally dissolved with the state, the name of your California LLC is not protected. Other entities may be eligible to use the name immediately.
Don't forget about taxes
You also need to make sure that all taxes owed by the LLC are paid and filed in a timely manner. If not, even if you filed your statement of dissolution, you can be assessed for additional penalties for failure to pay and file any due and outstanding taxes.
Finally, remember that if you are authorized to do business in other states, you will need to follow the necessary procedures within those states to decrease your chances of facing additional consequences outside of California. Swyft Filings can help with your withdrawal from any state where you are foreign qualified.