Closing a business in California is a multi-state, multi-step process that requires filing the appropriate dissolution, service, or cancellation forms with the Secretary of State (SOS) within 12 months of filing the final tax return. To dissolve a California corporation, submit the necessary forms to the SOS by mail or in person. The forms can be completed online and then printed, and must be written on or in black or blue ink. Checks must be made payable to the Secretary of State, and if submitting documents in person, include separate payment of the additional fee.
Additionally, a certificate of dissolution must be submitted before or together with the certificate of cancellation. When liquidating your business, the California Franchise Tax Board (CFTB) requires you to pay all tax balances due and file last year's tax return. LLCs that are classified as a corporation or entity not considered and doing business in California must file Form 568 annually. It's important to note that as soon as a California corporation dissolves, another entity can apply for the business name.
Therefore, it's important to take all necessary steps to ensure that your business is properly dissolved and all taxes are paid before closing your doors. The following steps will help you close your business in California:
- File the appropriate dissolution, service, or cancellation forms with the SOS within 12 months of filing the final tax return.
- Pay all tax balances due and file last year's tax return with the CFTB.
- Submit a certificate of dissolution before or together with the certificate of cancellation.
- Ensure that all necessary steps are taken to properly dissolve your business.