Legal Question in Business Law in California

To cancel the Application for Registration of a foreign (out of state or country) LLC, the foreign LLC must file a Certificate of Cancellation (Form LLC-4/7).

The form and instructions are on the Secretary of State Web site at www.sos.ca.gov.

Although the LLC theoretically owes the unpaid taxes, if it is defunct the Franchise Tax Board knows better than to waste time trying to collect from it, and probably could not hold the former member personally liable. Although I advise clients to pay the taxes they owe, I know of no instance where the authorities have pursued collection of taxes from folded corporations or LLCs or their founders.

In addition to the information so ably provided by my colleague, get a copy of your Delaware cancellation document(s) and your California Certificate of Cancellation. Then, call the California Secretary of State's office. (The telephone number is on their website.) Explain the situation to the clerk, who will then probably ask you to send him/her a copy of the cancellation documents. Once received, they will change the website to reflect that your Delaware LLC is no longer active in California.

I also am not aware of any instances where the California Franchise Tax Board pursued a member of a defunct LLC to collect unpaid taxes. You can also consult with an attorney in your area.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney