Legal Question in Business Law in California

Re: Dissolving corporation

You should dissolve the corporation, but will need to pay the annual minimum franchise tax for each year it was due and you didn't previously pay it. Allowing the corporation to linger will eventually add to this amount due - only dissolving it will prevent the addition of new taxes to the total.

I would recommend the use of an attorney to make sure all formalities are properly followed.

Re: Dissolving corporation

To dissolve a corporation in California you file a Certificate of Dissolution with the Secretary of State. You may be required to file a Certificate of Election to Dissolve at the same time. You also need to file a request for a tax clearance certificate with the Certificate of Dissolution which is forwarded to the Franchise Tax Board. You may owe the minimum franchise tax unless you paid it already. You also will probably have to file a final tax return even if almost all of the numbers are 0. There are a few other items to consider, and I would be happy to assist with the dissolution if you'd like the assistance of an attorney.

Regards,

Austin Bosarge

Re: Dissolving corporation

An attorney would never recommend just walking away from a corporation rather than paying the taxes (and perhaps legal fees) necessary to do a formal dissolution. However, if you were to look at the Secretary of State's records, you would find that the number of "suspended" corporations greatly exceeds the number listed as "dissolved," indicating that abandonment of no-longer-wanted corporations is commonplace.