Dissolving a California LLC — Formal Cancellation Guide
Dissolving a California LLC requires filings with BOTH the Secretary of State and the Franchise Tax Board. Simply stopping operations does NOT dissolve your LLC — the $800 franchise tax continues to accrue annually until you formally cancel. For all compliance, see our post-formation guide.
Steps to Dissolve
Step 1: Vote to Dissolve
Per the California Revised Uniform LLC Act, dissolution requires the vote specified in your operating agreement (or majority if silent).
Step 2: Wind Up Business Affairs
Pay debts, collect receivables, distribute remaining assets, close accounts.
Step 3: File Final Form 568 with FTB
File a final LLC Return of Income (Form 568) with the Franchise Tax Board. Mark as "final." Pay any remaining franchise tax and LLC fee owed.
Step 4: File Certificate of Cancellation with SOS
File Form LLC-4/7 (Certificate of Cancellation) with the Secretary of State:
- Fee: $0 (no filing fee for cancellation)
- File online at bizfileonline.sos.ca.gov or by mail
Step 5: Obtain Tax Clearance from FTB
The FTB must issue a Certificate of Tax Clearance confirming all taxes are paid. This may take several weeks.
Cost
| Item | Fee |
|---|---|
| Certificate of Cancellation (LLC-4/7) | $0 |
| Final Form 568 filing | $0 (but pay any tax owed) |
| Final franchise tax | $800 (for the year of dissolution) |
| Tax clearance | $0 |
Important: You owe the $800 franchise tax for the year you dissolve. The only way to avoid paying $800 for a given year is to dissolve before that year begins (before January 1 if calendar year).
FAQ
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Get StartedWhat if I just stop filing instead of formally dissolving?
The $800 continues to accrue. The FTB will assess penalties, suspend your LLC, and eventually send the debt to collections. Formal cancellation is the only way to stop the obligation.
Can a cancelled LLC be revived?
Potentially. File for revival with the SOS and reinstate with the FTB (pay all back taxes + penalties). Complex and expensive after extended lapse.
Does dissolution stop the $800 immediately?
The franchise tax is owed for the entire taxable year of dissolution. If you dissolve on June 15, you still owe $800 for that year. Plan dissolution timing accordingly — dissolving in January means you owe $800 for a year where the LLC only existed briefly.