How to Dissolve a Corporation in California
To dissolve a California corporation, you’ll have to satisfy the requirements of two agencies: the California Secretary of State and the California Franchise Tax Board. That will involve filing paperwork and paying any delinquent taxes. Below, we’ve answered our most frequently asked questions about how to dissolve a California corporation.
California Corporation Dissolution FAQs
How do I dissolve a California corporation?
Which form do I file to dissolve my California corporation?
How do I file the California dissolution form?
How much does it cost to dissolve a California corporation?
How long does it take to dissolve a California corporation?
What if I just stop filing Statements of Information?
Do I need a tax clearance to dissolve a corporation?
Can I dissolve a suspended or forfeited corporation?
1. Pay any owed fees, penalties, or California Franchise Tax payments to the California Franchise Tax Board.
2. File the correct dissolution form with the California Secretary of State.
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.
You can only file the dissolution forms by mail or in person. If you hand-deliver your dissolution form Sacramento, you’ll automatically be charged $15.00, but your filing will be given priority over mailed filings.
Secretary of State
Business Entities Filings Unit
PO Box 944260
Sacramento, CA 94244
1500 11th Street
Sacramento, CA 95814
There is no fee to file the California corporation dissolution form. If you’d like, 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.
Counter Drop Off in Sacramento: $15
10-Day Preclearance: $250
5-Day Preclearance: $300
72-Hour Preclearance: $400
24-Hour Preclearance: $500
The California Secretary of State’s processing times vary from season to season, but on average, processing time is around 3-4 weeks.
If you don’t properly dissolve your corporation, the California Secretary of State will likely forfeit your corporation. 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 dissolve your corporation.
Furthermore, if your corporation 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 the corporation properly.
No, you don’t need a tax clearance to dissolve a California 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. To dissolve your suspended or forfeited corporation, you’ll have to first fix the issues that led to suspension or forfeiture and revive your corporation. The steps for this process depend on which agency suspended your corporation.
If your corporation 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 corporation was suspended by the California Franchise Tax Board, you’ll have to file all past due returns, pay all penalties and fines, and file an Application for Certificate of Revivor – Corporation (FTB 3557 BC).
If your corporation has been suspended by both entities, you’ll want to first satisfy your requirements with the California Secretary of State. The Secretary of State will issue you 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 Certificate of Revivor.