California LLC Dissolution
California LLC Dissolution refers to legally ending the existence of a Limited Liability Company (LLC). Dissolving an LLC involves several steps.
If you are the owner of a California limited liability company and have made the decision to dissolve it, you will need to take the necessary steps to legally terminate your business according to the rules set by the California Secretary of State.
The first step in voluntarily dissolving a California LLC is checking the documents, which detail the procedure for dissolving the company. California allows an LLC to dissolve if a majority vote in favor.
The fee for filing a Certificate of Dissolution is $10.
If you don’t properly dissolve your corporation or LLC, you’ll lose the right to do business in California.
You don’t need tax clearance to dissolve a California LLC or corporation.
Steps to Dissolve an LLC in California
Dissolving an LLC in California involves several steps, such as following the operating agreement, obtaining member approval, settling debts and taxes, and filing dissolution documents with the Secretary of State. The dissolution process legally terminates the LLC’s existence as a business entity.
First, check the LLC’s governing documents like the operating agreement, which may outline dissolution procedures. These often include notifying members and voting on dissolution.
Then, file articles of dissolution once the vote has been recorded. The articles provide legal confirmation to the state that the LLC intends to dissolve.
Additionally, the LLC needs to pay all outstanding taxes to the Franchise Tax Board and IRS. File final tax returns for the LLC as well.
To officially complete the dissolution, submit a Certificate of Cancellation along with confirmation of final tax return filings. The Certificate of Cancellation can be filed for a small fee.
Before dissolution, the LLC must also settle remaining debts and distribute assets to members according to ownership stakes, as outlined in the operating agreement.
Following proper procedures for voluntarily dissolving an LLC in California is essential to avoid potential liability for members. LegalZoom and similar services can provide guidance on navigating the dissolution process smoothly.