When should we consider corporate dissolution for our San Diego or California LLC, S-Corporation or C-Corporation? The dissolution of a corporate entity usually occurs when it is so ordered by a Court, or when there is an agreement between all shareholders or members that the entity is no longer conducting business and should be dissolved. Dissolving the corporation eliminates several expenses and filing requirements for the company including:
- Payment of the $800 Annual Minimum Franchise Tax
- Reports and Fees for the California Secretary of State
- Filing of Tax Returns and Reports for the IRS as well as California State Agencies
The attorneys at the Watkins Firm have been serving the San Diego business community for decades, and have helped to dissolve hundreds of LLCs and corporations. If your corporation has been suspended or is not in good standing with the governing state, it will be necessary to “revive” the company which will include appropriate paperwork and the conveyance of fees prior to beginning the dissolution process.
Experienced Corporate Dissolution Attorneys Establish a Transition Plan
We will help you to accomplish all of the necessary steps to dissolve your corporation including:
- Preparation of corporate minutes and all necessary documents to approve and authorize the dissolution of your corporation or LLC.
- Completion of all existing contracts and obligations of the corporation, including the collection of associated receivables.
- Resolution of any outstanding disputes or business litigation involving the company
- Liquidation of any remaining assets
- Retiring all corporate debt and liabilities
- Establishment of a Corporate “Escrow” or “Reserve” account to pay off any future contingent liabilities of the corporation
- Completion of all final tax payments and associated returns to appropriate California taxation authorities and the IRS. All tax related matters must be completely resolved before distributions are made to the shareholders or members or they may be held personally liable and responsible for any remaining corporate tax liabilities
- Settlement of any remaining owner capital accounts
- Distribution of remaining profit to the shareholders or members per the shareholder agreement or operating agreement.
In California, the Franchise Tax Board (FTB) must issue a “Clearance Certificate” establishing that the company has filed all tax returns, and paid all required tax obligations (including any delinquent taxes and associated penalties and interest).
The State of California (or the State in which the company was originally incorporated) must consent to allow for the dissolution of the corporation or LLC. Once all of the above actions have been completed, all operations of the company have ceased and the Secretary of State or appropriate state agency has approved the dissolution a few final steps must be taken to complete the dissolution.
Contact the Experienced Corporate Dissolution Attorneys at the Watkins Firm
The only way an owner, shareholder or member of a California LLC or corporation can be released from personal liability for debts of the company is to ensure the legal dissolution of the corporate entity. This is a complex legal, tax and accounting process and the proven business lawyers at the Watkins Firm will work with you to ensure that the process is clearly established and that all criteria have been fulfilled and executed.
If you are considering a corporate dissolution in San Diego or throughout California we invite you contact us for a complimentary and thorough consultation at 858-535-1511. We will establish a comprehensive plan to take you through the process from beginning to completion and ensure that your business is concluded in a way that protects you from personal liability while maximizing the value of what you and other shareholders and members receive.