ANSWER

Expert Dennis Burbridge's Answer:

 

 

Based upon the limited facts and circumstances cited in your query, following please find a general outline of points specific to your situation. I draw your attention to the Cancelling a Limited Liability Company paragraph in direct response to your query.

 

Doing business in California as a foreign LLC –

 

California law requires LLCs not organized in the state of California to register with the California Secretary of State (SOS) before entering into any intrastate business in California.

 

The laws of the state or foreign country in which the LLC is organized generally govern the internal affairs of the LLC. The California SOS may not deny recognition of an LLC because the laws of the organization’s home state or foreign country differ from California’s laws, except in the case of professional service LLCs, which are not allowed to register as LLCs in California.

 

For newly-formed LLCs, the $800 annual tax payment is due and payable by the 15th day of the 4th month after the LLC registers with the California SOS, not the date it begins doing business. Any portion of a month from the registration date is considered a full month for calculating the annual tax payment due date.

 

Penalty for non-registered, suspended, or forfeited limited liability company (LLC) –

 

For taxable years beginning January 1, 2013, the Franchise Tax Board (FTB) will assess a $2,000 penalty against an LLC that is doing business within the state while not registered to do business within the state, or while suspended or forfeited.

 

Cancelling a Limited Liability Company

 

In general, LLCs are required to pay the $800 annual tax and file a California return until the appropriate papers are filed.In order to cancel an LLC, the following steps must be taken:

 

1. File a timely final California return (Form 568) with the FTB and pay the $800 annual tax for the taxable year of the final return.

 

2. File Form LLC-4/7, Certificate of Cancellation, with the California SOS. The California SOS also requires a domestic LLC to file Form LLC-3, Certificate of Dissolution. Contact the California SOS for more details.

 

The Form LLC-4/7’s effective date will stop the assessment of the $800 annual tax for future taxable years. If Form LLC-4/7 is filed after the taxable year ending date, a subsequent year return and an additional $800 tax may be required.

 

The annual tax will not be assessed if the LLC meets all of the following requirements:

 

• The LLC files a timely Final Limited Liability Company Return of Income, for the preceding taxable year, including extension.
• The LLC did not do business in California after the final taxable year.
• The LLC files the appropriate documents for cancellation with the California SOS within 12 months of the timely filed Final Limited Liability Company Return of Income.

 

 

I hope you find this information useful.  I would be pleased to assist you with the myriad of rules, regulations and filing requirements.

 

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