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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4380
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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What happens if we never paid any amount to maintain the corporation?

Customer Question

What happens if we never paid any amount to maintain the corporation? what should I do now? how much do I need to pay and to where?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Hi, can you tell me what state you're in? Corporation and business entity law is a state law (secretary of state) issue

NPVAdvisor :

From a legal perspective a corporation lives forever (as a separate entity) until and unless it's dissolved

NPVAdvisor :

And each state will have it's own rules for that (usually a filing of articles of dissoluton, at the least)

NPVAdvisor :

Each state will have it's opwn rules about annual filing fees as well

NPVAdvisor :

Let me know what state you're in, if you would, and we can go from there...

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4380
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Lane replied 1 year ago.


Hi,

... just checking back in, as I never saw you come int the chat.

Let me know more detail and I can get some answers for you.

(1) What kind of corporation (s-Corp, C-Corp, the the quasi corporation, LLC)

and (2) what state?


Let me know,

Lane


Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4380
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.


i'm in California. its a S corp.


i'm filing for 2012 and there has been no income or expenses for 2012. but we also never paid any fees for the corporation besides when we opened it in 2012.

Expert:  Lane replied 1 year ago.

Here ya go,

If there was no income, then you'll only be liable for the minimum $800 per year amount.

See this from the Ca Franchise Tax Board:

S corporations that are corporations, or LLCs under civil law corporations must pay the annual $800 minimum franchise tax.

From here: https://www.ftb.ca.gov/businesses/bus_structures/sCorp.shtml

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4380
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.


Ok so I guess I never paid the $800 for 2012.


1. I heard for the first year the corporation was opened I did not have to pay the $800. correct or false?


2. now that I did not pay what should I do? do I pay it now and where do I record it both on federal form and state?


Thanks

Expert:  Lane replied 1 year ago.


You are correct IF the company as a loss.

See This:

These corporations compute their tax by multiplying their net income for the year by 1.5%. (See Example 2 below)

Example 1 - First year loss:
Beta Corporation incorporates on February 21, 2000, and pays only the Secretary of State filing fee. Beta selects a calendar year end and when it files its first return for the short income year of February 21 to December 31, it shows that the corporation operated at a $3,000 loss. Because Beta is a new corporation, it is not subject to the minimum franchise tax for its first tax return.


Look a little less than 1/2 way down the page here: http://www.taxes.ca.gov/corpS.shtml
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4380
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you

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Lane
Lane
Tax Professional
4380 Satisfied Customers
Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986