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My friend has an LLC which he formed but never used and

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never paid the FTB their...
my friend has an LLC which he formed but never used and never paid the FTB their 800 for the past two years. doe s the same protection against personal tax liability apply to abandoning and LLC in California as it does for corporations?
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Submitted: 1 year ago.Category: Tax
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Answered in 17 minutes by:
6/3/2016
Tax Professional: Lev, Tax Advisor replied 1 year ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,160
Experience: Taxes, Immigration, Labor Relations
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the California franchise tax ($800 minimum) is due for EACH year the LLC was in existence.

That is a responsibility of the LLC - not a responsibility of the owner.

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Tax Professional: Lev, Tax Advisor replied 1 year ago

So if the LLC is abandoned - the owner may not be held responsible.

However - If the owner - who is an officer in charge of LLC operation took any distributions from the LLC or used the money for some unrelated purposes instead of paying tax liability - IN THIS CASE the owner may be held responsible.

But if the LLC was never funded - the owner is protected from LLC debts.

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If you still have any doubts, need clarification - please be sure to ask.

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Customer reply replied 1 year ago
My friend wanted to know since a bank account was set up and bank charges were taken. The account was closed and the few remaining dollars in it, about $100, were transferred to his personal account. does that count as a distribution subjecting him to personal liability. There was no other activity
Tax Professional: Lev, Tax Advisor replied 1 year ago

Yes - that is treated exactly as distribution.

Actually - $100 were owned by the LLC.

Your friend as a manager of the LLC should use that amount to pay LLC's tax liability.

Instead - he just pocket that amount himself.

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