How to Dissolve an LLC in California

In California, dissolving an LLC is a fairly simple procedure, although it does include some paperwork and a few stages. This tutorial will walk you through the procedure whether you want to dissolve your LLC because it is no longer profitable or for another reason.

The filing of a Certificate of Dissolution with the California Secretary of State is the initial step in dissolving an LLC in that state. The name of the LLC, the date of dissolution, and the reason for dissolution are all listed on this form, which notifies the state that you are dissolving your LLC.

Before dissolving your LLC, all outstanding debts and obligations must be paid. This includes resolving any legal challenges as well as paying off any unpaid loans, leases, or contracts. Any remaining assets must also be distributed among the LLC’s members in accordance with the operating agreement.

Step 3: Submit your final tax return A final tax return for your LLC must be submitted to the California Franchise Tax Board. This return will include any taxes due and will cover the time frame up to the date of dissolution. You can ask the Franchise Tax Board for a tax clearance certificate after filing the final return and paying any applicable taxes.

Step 4: Cancel any licenses, registrations, or permits Finally, you need to revoke any registrations, licenses, or permits the state of California has issued to your LLC. Any company licenses, seller’s permits, or professional licenses fall under this category. Any bank accounts connected to the LLC must also be closed.

You must pay the $800 annual LLC fee to the Franchise Tax Board if your LLC is still in existence and doing business in California. Every year, by the 15th day of the fourth month following the conclusion of your LLC’s tax year, you must pay this fee. You won’t have to pay this fee, though, if your LLC has been dissolved.

To dissolve your LLC, you must submit Form SI-550 to the California Secretary of State. The name of the LLC, the date of dissolution, and the reason for dissolution are all listed on this form, which notifies the state that you are dissolving your LLC.

Although they have slightly distinct definitions, dissolution and termination are frequently used synonymously. The process of closing down and liquidating an LLC’s business is referred to as dissolution. Termination refers to the time when the LLC ceases to be a legal person.

Other words that are frequently used similarly but have different meanings include dissolution and cancellation. The process of closing down and liquidating an LLC’s business is referred to as dissolution. The act of canceling the LLC’s California state registration is referred to as cancellation. An LLC ceases to be a legal entity after being canceled.