Beginning January 1, 2019, eligible California domestic corporations and domestic Limited Liability Companies (LLCs) that have ceased doing business and have no assets may be eligible for administrative dissolution/cancellation under recently enacted AB 2503. The bill provides two options for administrative dissolution of qualified entities:
- Administrative Dissolution/Cancellation – Authorizes the Franchise Tax Board (FTB) to administratively dissolve those domestic corporations and LLCs that are suspended, have ceased doing business, been suspended for 60 or more consecutive months, paid all taxes, and filed all returns due as of the date the entity ceased doing business.
- Voluntary Administrative Dissolution/Cancellation – Authorizes the FTB to abate, upon written request by a qualified entity, the unpaid qualified taxes, interest and penalties for the taxable years in which the entity certifies, under penalty of perjury, that it was not doing business, and does not have any remaining assets in the business.
The FTB is currently developing policies and procedures to enable staff to easily identify and process business entities that meet the requirements for an Administrative Dissolution/Cancellation. However, due to the projected high volume,they anticipate it will take time to fully implement these processes (so they appreciate your patience!)
Additional information will be available on the “Businesses” link on the FTB website.