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March 2009
How To Dissolve a California Corporation, and Close Down Your Business
Prepared By: Melissa C. Marsh, Los Angeles Business And Corporate Attorney
This article first describes why an inactive California corporation should be dissolved and then explains how to dissolve a California corporation.
Every California corporation, whether or not actively engaged in business, is required to:
- Remit payment of the state's $800 annual minimum franchise tax;
- Notice and hold the annual meeting of the shareholders to elect the directors of the corporation, and prepare minutes, or resolutions, for that annual meeting;
- File an annual Statement of Information Of Officers and Directors with the Secretary of State and pay the $25 filing fee; and
- File an annual tax return with the Franchise Tax Board (even if the California corporation did not earn a penny).
Every California corporation must perform all four of the above actions annually, even if the corporation did not transact any business. It is therefore often desirable to wind up and dissolve (close down) an inactive California corporation.
Let us assist you in closing down your California corporation. We can: (1) prepare your minutes, or resolutions, documenting the corporation's intent to wind up and dissolve; and we can (2) prepare and file the appropriate documents with the Secretary of State for as little as $499 (if all of the shareholders are in accord). If your corporation is a foreign corporation (a corporation formed in any other state (e.g. Nevada, Arizona, Delaware, etc...), we can prepare and file the Certificate of Surrender for the same low fee.
By having your corporate dissolution documents prepared properly you lessen the likelihood that they will be rejected by the Secretary of State which can prolong the dissolution process by months. To prevent any risk of loss and to expedite the process, we always have your corporate dissolution documents hand delivered to the Secretary of State's Office. When handled properly in this manner, we are typically able to prepare all of the paperwork and submit it for filing within 72 hours. If you choose to prepare the documents yourself and mail them to the Secretary of State's office, the process can take up to 3 months, not including any delays for a rejected filing.
Once the corporate minutes have been prepared and approved, and the Secretary of State has acknowledged a proper filing, the corporation can arrange to file its final tax return with the Franchise Tax Board. Once accepted, the dissolution process is complete.
It should be noted that a California corporation that is suspended cannot be dissolved until it is first revived. Although we can prepare your minutes to close down and dissolve your California corporation and the state required certificate of dissolution and/or certificate to wind up and dissolve, we cannot file them with the California Secretary of State on behalf of a corporation that has been suspended by either the Secretary of State, or the California Franchise Tax Board pursuant to Revenue and Taxation Code Sections 23301, 23301.5 and 23775. See, My California Corporation Is Suspended.
Please call Melissa C. Marsh at 818-849-5206 or Send us an Email if you have questions about how we can assist you in dissolving a California corporation.
Update: Due to cutbacks instituted by the State of California, the processing time for dissolving a corporation or limited liability company has increased from 10 days to an average of 52 business days. We therefore strongly recommend that our clients remit payment of the California Secretary of State's expedite fee of $350 plus $15 over the counter fee to ensure the timely processing of their documents within 7 business days.
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California business lawyer, Melissa C. Marsh, is based in Sherman Oaks and West Hollywood, and serves individuals and businesses throughout Los Angeles County, including: West Hollywood, Miracle Mile, Beverly Hills, Century City, Santa Monica, Burbank, North Hollywood, Valley Village, Toluca Lake, Studio City, Sherman Oaks, Van Nuys, Encino, and Woodland Hills.
© 2009 Melissa C. Marsh. All Rights Reserved.
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