What is the Safe Way To Close Down Your California Business
Apr 14 2021 0

What is the Safe Way To Close Down Your California Business?

If you have a California business that is no longer operating you are likely wondering what the next steps are and what you should do. There are several reasons why a business stops operating including an owner deciding to change the business’s name, a business is sold and the new owners change the structure, or maybe your business venture just didn’t work out as you planned. If you had a corporation or a limited liability company, you are responsible for filing a Statement of Information with the California Franchise Tax Board. Failure by a business owner to do so can result in the suspension of operations.

Even though your business is no longer in operation, having a suspension may not seem like a big deal. The reality is that there are still steps you should take to avoid having to face the consequences of just letting your business go by the wayside. When you are coming to the end of running your business, you should make sure you take care of all of the final matters that revolved around your business, officially close it down from operating, and then completely end the existence of the business.

What Should You Do To Close Your California Business?

What is the Safe Way To Close Down Your California BusinessBecause there are different reasons as to why a business ceases its operations, the actions on the part of the business owner to successfully close down their business will vary.  All businesses though that aren’t properly shut down could potentially face yearly taxes as high as $800 along with interest and penalties on top of that tax. So even though your business is no longer in operation, if you don’t properly close it down and get rid of it, the state of California will assume it is operational, suspend it, and then send you a hefty bill.

The amount of money you may have to spend for a business that you are no longer running can add up and become significant. You are expected to pay the Franchise Tax Board this money, and the officials with the board will come after you personally for the money if you fail to pay. This is a very precarious situation to be in. Especially if your business has been non-operational for many years, these taxes, interest, and additional fees can be extensive. 

It is best to know what debt you owe the state of California if you haven’t paid much attention to your business over the years. You are likely in debt to the state for a large amount of unpaid taxes and getting them taken care of sooner rather than later is in your best interest.

Speak with a California Business Attorney Today

If you didn’t close your business down the right way, you are going to have to go back find out how much you owe and pay those taxes then revive your company followed by officially dissolving it. It is going to be a time-consuming process and potentially a very expensive one. When you work with the California business attorneys at Leiva Law Firm, you will have access to detailed legal counsel that has your best interests in mind. For any questions about your Los Angeles business, please call the Los Angeles Business lawyers at the Leiva Law Firm to request a free consultation at (818) 519-4465. 

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