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The following article was published in our article directory on September 5, 2012.
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Dissolve a California LLC

Article Category: Legal

Author Name: John Pena

There are a number of reasons why an LLC may file for dissolution. For instance, the company may have incurred large debts over time and it is no longer capable of paying them. There are also instances when huge loss of profits causes an LLC to dissolve itself. In these cases, if push comes to shove and the situation cannot be avoided from happening, then dissolving the LLC may be the best option to go for.

But aside from these negative events, there are also some positive instances when an LLC may decide to file for dissolution. For instance, there may be an expected merger. Or the executives are thinking of starting a new business.

Whatever the cause for the dissolution is, the owner and members must bear in mind that there is a certain legal process that has to be followed here. This is actually governed by law. And you will have to file the necessary documents with the California Secretary of State.

To guide you through this, here are the steps that you should do.

1. Method of dissolution

For one, your LLC members and owner should agree to the applicable method or way of dissolution. In there is a consensus from all the parties involved, then you will have to have a LLC-4/7. But if the decision is not unanimous, then you have to file both the LLC-4/7 as well as the Form LLC-3.

You can download these in the website of the Secretary of State of California. Or you can get the forms personally from its office.

2. Fill out and submit the forms

The next step would be to complete the forms. Make sure that you provide all the necessary information such as the name of your California LLC, the address, and the filing number. Then affix your signature on the papers. You will then have to submit these forms to the California Secretary of State.

3. Pay the required fees

Even the dissolution involves some fees. Although you must know that the filing fees for dissolution can vary from one state to another. To be sure, you can visit the website of the Secretary of State of California and find the appropriate fees there. This way, you will not end up paying for more than what is necessary.

4. Send out notifications

You also have to notify all the people and agencies involved with your California LLC that you already filed for dissolution and that the process was already completed. For instance, you will have to notify the IRS. There are necessary forms for this. You will also have to notify your creditors.

5. Distribute the assets

The next step would be to distribute the assets of the LLC. This will be according to the ownership interest of every member. Then you will again have to get in touch with the IRS and inform them of the distribution.

6. End all accounts

Finally, you will have to terminate all the accounts, permits and licenses of your California LLC. Get in touch with all the banks, government agencies and companies where you have accounts.

Keywords: california llc, california incorporation

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