Wednesday, January 2, 2013

California Businesses: File Your Entity Dissolution by Jan 15


Are you planning to close your California business in the near future?  If so, this is important information. 

Qualified business entities that are dissolved by January 15 will not be charged any state franchise taxes for 2013.  The state used to require businesses to file for dissolution by December 31 to avoid the next year’s taxes, but California now allows you 15 additional days to get your paperwork in.  This applies to corporations, limited liability companies, limited liability partnerships, limited partnerships, not-for-profit corporations and certain exempt corporations. 

You must still file your 2012 final or annual tax return and timely pay the applicable taxes for the year in order to take advantage of this opportunity.  Please note, you may request an extension of time to file your return, which gives you an additional six months to submit it to the state.  However, the taxes must be submitted when due.  For corporations, the regular filing deadline is March 15.  For LLCs and partnerships, the deadline is April 15.   

Don’t forget that any outstanding liabilities owed by the entity remain in effect even after it is dissolved.  Filing for dissolution simply ensures that your business will not incur liabilities for additional years.  For more information about dissolving your entity, go to the California Franchise Tax Board website at https://www.ftb.ca.gov/individuals/faq/ab2341faq.shtml.

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