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LLC tax I would like to close the llc without paying

LLC tax I would...

LLC tax I would like to close the llc without paying California franchise tax

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I was told that if i don't pay two consecutive years it can be treated as involuntarily disolvation

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Customer reply replied 1 month ago
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1/18/2018
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 935
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Please give me a few minutes to type my answer.

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In CA, if you want to dissolve a LLC, all filings and payments must be up to date.

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Administrative dissolution of an LLC occurs when an LLC fails to follow the state’s requirements, resulting in the state agency penalizing or dissolving the LLC. In California, these requirements include payment of the annual tax and fee, in addition to filing the initial and biennial Statement of Information.

So if you don't pay your annual fee, your LLC will be automatically dissolved.

California will administratively dissolve or surrender a corporation that:

  • The State has suspended or forfeited for more than 48 continuous months.
  • Is no longer in business.
  • Has not filed returns for 4 or more years.
  • Has not filed a Statement of Information with California Secretary of State (SOS) for 4 or more years.

The FTB"s administrative dissolution process is fairly involved and time-consuming. It is:

  • They send a notice to the nonprofit corporation’s last known address. If They do not have a valid address, They deem that posting on the SOS’s website that the LLC is administratively dissolved or surrendered is sufficient notification.
  • The SOS provides a 60-calendar day notice of the pending administrative dissolution or surrender on their website. They list the corporation name and the SOS file number.
  • If they receive no written objection before the 60 day period expires, the llc is administratively dissolved or surrendered.
  • They abate qualified tax, interest, and penalty liabilities upon administrative dissolution or surrender.
  • Liabilities to creditors do not discharge. Liabilities of the director or persons related to the administratively dissolved or surrendered llc do not discharge. A llc’s administrative dissolution or surrender shall not diminish or adversely affect the AG’s ability to enforce liabilities.

So, if you don't pay the tax, the FTB will have you administratively dissolved, but it takes more than 4 years.

If your paperwork is up to date, and all returns filed (and the annual fees paid) you can file a certificate of dissolution at no charge. The llc would then be dissolved at that point.

I hope this answers your question. If you have any more, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

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Customer reply replied 1 month ago
if i am paying a dissolution and paying no tax, would that be faster process? Also, how much do you charge for filing a dissolution of California LLC along with my personal tax return?

IF your filings are up to date, and you owe no CA franchise tax, you simply file a Form LLC-4/7 with the State. You can prepare it online and print it off. Then, you can either bring it to a Secretary of State office, or mail it to them. You do not file it with your tax return. You file it as soon as possible.

Here is a link to the form:

http://bpd.cdn.sos.ca.gov/llc/forms/llc-3--4-7.pdf

According to the CA SOS website, the current processing time for LLC terminations is 15 days. Today (1/17/2018) they are processing forms that were dropped off or received in the mail on 1/2/2018.

This is certainly faster than waiting 4 years!

Let me know if you have any more questions. I would be happy to answer.

taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 935
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
Verified
taxmanrog and 87 other Tax Specialists are ready to help you
Ask your own question now

Do you have any more questions? If you need assistance with your personal return, please let me know and I will send you a request for an email exchange and we can discuss it.

Thanks!

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taxmanrog
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 935
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Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.

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