When the decision is made to close an LLC in California, it’s important that business owners take the time to fully understand the process and associated costs. Whether you choose to follow your state’s dissolution procedure, dissolve the company voluntarily, or have the courts intervene for a judicial dissolution, each method has different requirements and associated fees. In this article, we’ll explore a few of the main costs involved in closing an LLC.
Many LLCs choose to dissolve voluntarily when the company’s members reach a consensus that the business should be closed. The internal requirements for this process are typically outlined in the company’s formational documents including the articles of organization and the LLC operating agreement. If the LLC complies with these rules, it may be able to file a Certificate of Dissolution and later a Certificate of Cancellation with the California Secretary of State.
This method can be time consuming, but it is an effective way to close a company and protect members’ personal assets. If the company has any assets left, they can be distributed amongst members in accordance with the operating agreement or state law. In addition, the company can complete its winding up process by paying any final taxes and filing its final tax return with the Franchise Tax Board.
The multifaceted process of dissolving an LLC requires the guidance of a knowledgeable Los Angeles business attorney to ensure compliance with laws and regulations, mitigate potential legal risks, and facilitate drafting and reviewing of the necessary dissolution documentation. Contact us today to discuss your business’s legal needs.