The process of Legally Closing a LLC in California is called Dissolution.  After a California LLC has been Dissolved, it ceases to be Legally Active in the California Secretary of State's records and may no longer Legally conduct business in the state of California.

A California LLC is created when the CA Secretary of State approves the Formation Documents - the Articles of Organization.  A record of the California LLC is added to the list of LLCs which have officially registered with the California Secretary of State.  Once a LLC is registered with the California Secretary of State, that LLC immediately has both reporting and tax obligations which incur penalties if the obligations are not met by the required deadlines.

If you've registered a California LLC with the California Secretary of State and want to cease business activities you have to let the CA Secretary of State know that you intend to close your company.  Only after the CA Secretary of State has made sure that all of the obligations of the California LLC have been fulfilled will the Secretary of State approve of the closure of the company.

When the California Secretary of State approves the closing of a CA LLC, that California LLC is said to be Dissolved.  The process of Dissolving a California LLC is called California LLC Dissolution.

Dissolution documents for a California Limited Liability Company cannot be filed with the CA Secretary of State if the California LLC has been suspended by the California Franchise Tax Board (California FTB).

Upon the effective date of the Certificate of Cancellation of the California LLC by the California Secretary of State, the Articles of Organization of the California Limited Liability Company will be cancelled and the powers, rights and privileges of the CA LLC will cease in the state of California.

As soon as a California LLC is registered with the CA Secretary of State, that LLC is responsible for recurring obligations of the California Secretary of State and the California Franchise Tax Board.  If a California LLC does not file its required reports or pay its tax obligations, then that CA Limited Liability Company could be responsible for penalties which compound as time goes by.

Unless you Dissolve (Legally Close) your California LLC with the California Secretary of State that CA Limited Liability Company will be responsible for all recurring fees and penalties until the company has been legally closed.

California LLC Dissolution is one part of a larger process commonly called the "Winding Up" process.

There are things you need to do before you can request approval of LLC Dissolution from the California Secretary of State; and things that you have to do after the CA Secretary of State has approved Dissolution of the California LLC.

When a California LLC is originally created, the Members (owners) may create a document called an Operating Agreement.  The Operating Agreement may include pretty much anything that has to do with running the LLC, including specific requirements which need to be followed before the LLC may be Legally Closed.  Before you do anything else, you should review the Operating Agreement for anything that needs to be done before the Business is Legally Closed.
What you have to do both before and after the California LLC is Dissolved largely depends what kind of debts and liabilities that the California LLC has.  If the California LLC has not commenced business activities then the CA LLC Dissolution process is easier.

1. Hold a Members meeting and record a resolution to Legally Close the California LLC
   
   
   California LLC Dissolution is one part of a larger process commonly called the "Winding Up" process.
   
   A meeting should be held of all Members of the California LLC and a vote to Legally Close the California Limited Liability Company taken.  There should be a majority of Members who vote Yes to Legally Close the company. A formal date on which the LLC will be closed should be specified.  Minutes of the meeting should be recorded and retained in the business records.  If the California LLC does not have any Members then the Organizer(s) have to apply for Dissolution of the California LLC.
   
   
   We can transcribe and compile any minutes or approvals into a form that is legally recognized by the California Secretary of State.
   
   
2. File a Certificate of Cancellation with the CA Secretary of State
   
   
   The Certificate of Cancellation to Dissolve must be filed with the California Secretary of State before initiating the final stages of the California LLC Dissolution process.
   
   
   We can prepare your Certificate of Cancellation and file it with the CA Secretary of State.
   
   
3. File all required Biennial Statement of Informations with the California Secretary of State
   
   
   The California Secretary of State will not approve the Dissolution of a CA LLC until all required administrative reports have been filed.
   
   
   We can file any required Biennial Statement of Informations with the CA Secretary of State quickly and easily.
   
   
4. File all required tax returns with the California Franchise Tax Board
   
   
   The California Secretary of State will not approve the Dissolution of any CA LLC until that LLC has fulfilled all its tax obligations with the California Franchise Tax Board.
   
   
5. Clear up any business debts
   
   
   All creditors of a California LLC should be given notice of the pending LLC Dissolution. Each creditor should be given a mailing address to which they may submit claims as well as a deadline by which claims may be submitted.
   
   
6. Pay all taxes and administrative fees owed by the California LLC
   
   
   The California Secretary of State will definitely not approve the Dissolution of a California LLC until all outstanding taxes and applicable registration and administrative fees have been paid.

1. Distribute all remaining assets of the California LLC
   
   
   If the California LLC has any remaining assets, these may be divided according to the Members' ownership interests in the CA Limited Liability Company.  Refer to the Articles of Organization for specific requirements, if any, for asset distribution.  All distributions to LLC Members must be reported to the IRS.
   
   
2. Close all business bank accounts of the California LLC
   
   
   If there are any business bank accounts that have been opened for the California LLC then those accounts must be closed.  If any business bank accounts are left open then there may be liability and obligations of the Dissolved California LLC which could lead to legal problems down the line.
   
   
3. Cancel all local business licenses and permits of the CA LLC
   
   
   If the California LLC has obtained any state, regional, county or city business licenses or permits, there may be cancellation requirements associated with those licenses or permits.  Each of those must be cancelled to avoid any reporting or fiscal obligations the California LLC may have.  This includes business registration licenses as well as reseller permits.
   
   
4. File IRS Form 966
   
   
   A dissolved California LLC may be required to file IRS Form 966 with the US Internal Revenue Service.  If a California LLC is required to file IRS Form 966, that filing is required within 30 days after the final Dissolution plan is approved.  Filing IRS Form 966 lets the Federal Government know that the California LLC has been legally Dissolved so that it may take the appropriate actions.
   
   
   We can prepare IRS Form 966 for you to file.
   
   
5. Cancel the IRS account associated with the CA LLC's Federal Tax ID (EIN)
   
   
   A Federal Tax ID, or Federal Employer Identification Number (EIN), is like a Social Security Number for the California LLC.  Once the IRS links an EIN to a California LLC, that EIN stays with the California LLC even after the Company has been Legally Closed by the California Secretary of State.
   
   When the IRS processes the final tax return for the California LLC, they automatically make the EIN inactive.  However, the account associated with the EIN is not automatically closed.  Closing the account associated with the EIN lessens the likelihood of any problems with the EIN account, or with the IRS, in the future.
   
   If you should decide to revive the California LLC down the line then the IRS will reactivate the old EIN for your new Business.
   
   Before a California LLC can close an EIN account, it must be in Good Standing with the IRS.  The California LLC must have filed all required tax returns and paid any applicable fees and penalties due to the IRS.  The California LLC cannot close its EIN account until the IRS has received payment for any tax amounts the Company may owe.
   
   
   We can prepare the formal documents which you can sign and submit to the IRS in order to close the account associated with your EIN.
   
   
6. Keep Records of all Pertinent Business Documents
   
   
   In order to avoid problems down the line, you should keep copies of all tax filings, contracts and employment records on file as well as Certified Copies of all company documents filed with the Secretary of State.  This includes your Formation Documents - your original Articles of Organization and any Amendments - and all Dissolution douments.

You notify the IRS that your California LLC has been Closed on the final tax return that is filed for your Business. 

If you have employees and file taxes quarterly with IRS Form 941, Employers Quarterly Tax Return, check the appropriate box on that form to let the IRS know that your LLC has Closed.  If you file yearly taxes do the same on IRS Form 944, Employers Yearly Tax Return. You should also attach a statement to the return showing the name of the person keeping the payroll records and the address where those records will be retained.

When you opened your California LLC you most likely were assigned a Federal Employer Identification Number (EIN).  Once the IRS links an EIN to a LLC, that EIN stays with the LLC even after the Company has been Dissolved.  If you don't plan to reopen your California LLC after it has been Closed, you should cancel the EIN account that has been assigned to your Company.

The time it takes to Dissolve a California LLC varies depending on how long it takes to complete the actions that are required in each specific case - holding meetings, closing accounts, distributing assets, etc.

The California Secretary of State requires a Tax Clearance Certificate from the CA Franchise Tax Board before it will approve the Dissolution of a California LLC.

The time it takes the CA Franchise Tax Board to process a request for a Tax Clearance Certificate depends on the tax status of the California LLC. In some cases it could take 5-6 weeks or more to get a Tax Clearance Certificate from the California Franchise Tax Board.

Once the initial actions are completed, the California Secretary of State usually takes around 5-7 business days to process the Certificate of Dissolution.

Processing times for California LLC Dissolution filings vary depending on the work load of the Secretary of State's staff.  We've found that normal processing of California Dissolution filings takes the state around 5-7 business days.

We are dependent on, and have no control over, the staff and systems of the California Secretary of State or California Franchise Tax Board.  In our experience 5-7 business days is the time it usually takes the California Secretary of State to process a California Dissolution filing.  We get your California LLC Dissolution filing to the CA Secretary of State as soon as possible after we receive your order.  Once it is at the state we have no control over the California Dissolution approval process.

The total cost to Legally Close a California LLC varies depending on exactly what is required for each specific CA Dissolution.  We charge $249 plus any state fees for our California LLC Dissolution services. This includes:

We also offer these California LLC Dissolution services separately as explained below.

If there are Foreign Limited Liability Companies in states other than California that are tied to the Domestic California LLC then each of those Foreign LLCs must be Dissolved before the California LLC can be legally Dissolved.

A California Limited Liability company name becomes available for anyone to use when the California LLC is Dissolved by the California Secretary of State. There are no LLC company name protections in California once a California LLC has been Dissolved by the California Secretary of State.