Dissolution starts the process of closing a business, leading to the winding up of the company before termination. In California, there are three methods to dissolve an LLC.
After closing your LLC in California, it shall be canceled, and you can no longer conduct business using that LLC. The consequences depend on whether you were the only owner or if there were others.
Differences Between Dissolution and Cancellation
Dissolution is when you file to dissolve your LLC, while termination is when the state cancels your company. Dissolution and cancellation differ. Cancellation occurs when a business license is revoked for not following regulations.
Understanding LLC Dissolution and Cancellation
Dissolving an LLC starts the process of closing a business, and it does not mean the business is terminated. It starts when an event triggers the need to dissolve or the need for the LLC to stop operating. However, it must be according to the operating agreement.