To dissolve an LLC or corporation in California, you’ll have to file the correct paperwork with the California Secretary of State and file your final franchise tax return with the California Franchise Tax Board.
The form you’ll need to file to dissolve your California corporation depends on how your shareholders voted to dissolve.
If all your shareholders voted unanimously to dissolve the corporation, you’ll file Form DISS STK—the Certificate of Dissolution.
If the decision to dissolve was not unanimous, you’ll use Form ELEC STK—Certificate of Election to Wind Up and Dissolve to dissolve your corporation.
If your corporation is less than one year old and meets a few other requirements, you may be eligible to file Form DSF—STK—the Short Form Dissolution Certificate.
It’s important to note that if you file your dissolution form without filing your final California Franchise Tax return, your corporation will remain active with the Franchise Tax Board.
The California corporation dissolution forms are available on the Secretary of State’s website.
The form you’ll need to file to dissolve your California LLC depends on how your members voted to dissolve.
If the vote to cancel the LLC was unanimous, you’ll file the Certificate of Cancellation (Form LLC 4/7).
If the vote to cancel the LLC was not unanimous, you’ll file the Certificate of Dissolution (Form LLC-3).
A California LLC that is less than one year old, hasn’t conducted any business since registering, has no debts, and meets a few other requirements is eligible to file the Short Form Cancellation Certificate (Form LLC 4/8).
The California LLC dissolution forms are available on the Secretary of State’s website.
California dissolution/cancellation forms can only be filed by mail or in person. Note: hand-delivering your dissolution form in Sacramento will automatically cost you $15.00, but your hand-delivered filings are given priority over mailed ones.
There is no fee to file the California dissolution forms. To speed up the process, you can pay for expedited service and preclearance. Preclearance means that you can drop your document off in person for a review prior to filing to ensure you haven’t made any mistakes that will get your filing rejected.
The California Secretary of State’s processing times vary based on traffic, but it will probably take their office around 3-4 weeks to process your dissolution.
If you don’t properly dissolve your corporation or LLC, the California Secretary of State will likely forfeit your business. This means that you’ll lose the right to do business in California and be charged a $250 penalty. You’ll also continue to owe the annual California Franchise Tax (a minimum of $800) until you file to dissolve.
Furthermore, if your business is suspended or forfeited, you won’t be allowed to dissolve it until you revive it—a process that will cost you another $20 and hours of your time.
It’s much easier (and more economical) to dissolve your business properly.
No, you don’t need a tax clearance letter to dissolve a California LLC or corporation. However, your dissolution form requires you to state that you’ve filed your final California Franchise Tax return and are up-to-date on taxes.
No. Before you can properly dissolve or cancel a forfeited business, you’ll need to revive it. To do so, you’ll need to fix the issues that led to suspension or forfeiture.
The process for reviving a business in California depends on what agency suspended or forfeited your business.
If your business was suspended by the California Secretary of State, you’ll have to file your late Statement of Information and pay a $20 filing fee and the $250 penalty.
If your business was suspended by the California Franchise Tax Board, you’ll have to file all past due returns, pay all penalties and fines, and file the correct reinstatement form. California LLCs file the Application for Certificate of Revivor—Limited Liability Company (this form is only available by request from the California Franchise Tax Board). Corporations file the Application for Certificate of Revivor—Corporation (FTB 3557 BC).
What if your business was suspended by both agencies? In that case, you’ll need to start with resolving your issues with the California Secretary of State. Once you’ve filed your missing Statement of Information, the SOS will issue a letter of proposed relief from suspension or forfeiture. You’ll need to provide this letter to the California Franchise Tax Board when you file your Application for Certificate of Revivor.