For various reasons, you may find that your California LLC has fulfilled its purpose. Whether you’re moving on to new ventures or have reached the end of your current mission, it is important to formally dissolve your LLC to avoid leaving any loose ends. Here’s a step-by-step guide to help you dissolve your enterprise cleanly and avoid personal liabilities.

Deciding How to Dissolve

In California, there are three primary methods to dissolve an LLC voluntarily:

1. Unanimous Consent: If all LLC owners agree to dissolve the business, you can submit a Certificate of Cancellation (Form LLC-4/7).
2. Short Form Certificate of Cancellation: If your LLC is less than a year old, has no non-tax debts, investments, or assets, and hasn’t conducted business since filing your initial articles of organization, you can file a Short Form Certificate of Cancellation (Form LLC-4/8). This option requires approval by a majority vote of your members.
3. Standard Procedure: In all other cases, you must file a Certificate of Cancellation (Form LLC-4/7) along with a Certificate of Dissolution (Form LLC-3).

Filling Out the Forms

The Certificate of Cancellation and Certificate of Dissolution forms require similar information, including:

• The company’s filing number, found on your initial registration document and any subsequent amendments.
• The company name exactly as it appears in the Secretary of State’s records, including suffixes like LLC or Limited Liability Company.
• Optional relevant information, such as the reason for your dissolution if not prompted by a formal member vote.
• Names and signatures of the individuals filing the form, along with the name and address of a contact person for further communications regarding the dissolution process.

Submitting the Forms and Tying Up Loose Ends

Once you’ve completed the paperwork, mail it to the address indicated on the forms. California does not charge a fee for filing for cancellation or dissolution, but for $15, you can expedite your case by submitting it in person at the Sacramento office of the Secretary of State.

Minimal filing fees do not exempt you from handling other financial obligations. If you are behind on tax returns or have outstanding penalties, fees, balances, or interest, you must settle these with the state’s Franchise Tax Board. Failing to address tax obligations can result in the Secretary of State denying your termination request. Therefore, it’s crucial to resolve these issues beforehand.

After submitting the forms, you can expect the dissolution process to wrap up relatively quickly. You can check the Secretary of State’s website for current processing wait times. Additionally, if you opt for expedited processing, you can expect the filings to be completed within a day or 24 hours, depending on the fee paid.

Following these steps will help ensure that your LLC dissolution is handled correctly and efficiently, minimizing potential legal and financial issues in the future.

Resources

• California Secretary of State – Dissolving, Surrendering, or Canceling a Business Entity: https://www.sos.ca.gov/business-programs/business-entities/canceling-entity
• California Secretary of State – Forms, Samples, and Fees: https://www.sos.ca.gov/business-programs/business-entities/forms
• California Secretary of State – LLC Dissolution Forms: https://bpd.cdn.sos.ca.gov/llc/forms/llc-3–4-7.pdf
• California Secretary of State – Business Entities: https://www.sos.ca.gov/business-programs/business-entities

Disclaimer

This article is intended solely to convey informational content and should not be construed as providing legal counsel. The views and expressions within this article are those of the author and have not been verified for accuracy or alterations in legislation by PhysicalAddress.com.