Although it might be a difficult process, dissolving a corporation in California is necessary if you wish to close your company and move on to new endeavors. This article will walk you through the process of dissolving a corporation in California step-by-step.
Hold a board meeting as the first step
Holding a board meeting is the first step in dissolving a corporation in California. The directors will have to decide whether to dissolve the corporation at this meeting. The filing of the required documentation with the California Secretary of State will also require approval by the board.
Articles of Dissolution must next be submitted to the California Secretary of State. Information concerning the corporation, such as its name, address, and dissolution date, must be provided. Additionally, there is a $30 filing fee for the Articles of Dissolution.
The next step is to inform the Franchise Tax Board. You must inform the Franchise Tax Board (FTB) of the dissolution after submitting the Articles of Dissolution. To accomplish this, submit a final tax return to the FTB and mark the box that says the corporation is no longer in operation. Before the FTB will approve the final tax return, you must pay any outstanding taxes or fees.
Closing business accounts is step four. Closing all business accounts, including bank accounts, credit cards, and vendor accounts, is the last step. Additionally, you must revoke any licenses or permissions the corporation currently holds.
Because of the state’s high tax rates and the expense of doing business in California, California LLC fees are higher than those in other states. The state imposes one of the highest yearly fees on LLCs in the nation, at $800. LLCs also have to pay a franchise tax that is dependent on their net revenue. Do You Need to Pay the $800 California LLC Fee in 2021? Yes, you must pay the $800 California LLC registration fee in the first year of business. Within six months after the day the LLC is created, the fee is payable.
Do You Have to Pay the $800 California S Corp Fee in the First Year, After All? Yes, you must pay the $800 California S Corp registration fee in the first year of business. Within six months of the corporation’s formation, the fee is payable. How Can I Avoid California’s LLC Franchise Tax?
In California, there are a number of strategies to reduce or evade LLC franchise tax. One option is to set up the LLC in a state without an LLC franchise tax. Another option is to set up the LLC as a sole proprietorship or partnership, which are not subject to the franchise tax. Additionally, LLCs can deduct specific costs from their taxable revenue, such as salaries and wages, which can lower their franchise tax obligation. For advice on the best approach for decreasing or evading LLC franchise tax in California, speak with a tax expert.