How do I formally dissolve my California LLC with the Secretary of State and the Franchise Tax Board?

To formally dissolve your California LLC, you must complete the winding-up process, satisfy your obligations with the Franchise Tax Board (FTB), and file a final cancellation document with the Secretary of State. Here are the steps to formally dissolve your LLC: Step 1: Member Approval to Dissolve Your LLC’s members must first formally vote or consent to dissolve the company. Follow the voting procedures outlined in your operating agreement. If your agreement is silent, California law requires a majority vote. Document this decision in writing. Step 2: Wind Up Business Affairs You must cease all business activities not related to dissolving the LLC. This "winding up" period involves paying all known company debts, collecting any money owed to the LLC, liquidating assets, and handling any final obligations as required under California Corporations Code Section 17707.05. Step 3: File Final Tax Returns and Pay Taxes You must file a final California Limited Liability Company Return of Income (Form 568) with the Franchise Tax Board. Check the "Final Return" box on the form. You must pay all outstanding taxes, fees, and penalties, including the $800 annual franchise tax for the final year, before the state will process your cancellation. Step 4: File Certificate of Cancellation (Form LLC-4/7) Once you have met your tax obligations, you must file a Certificate of Cancellation (Form LLC-4/7) with the California Secretary of State. This form officially terminates your LLC's existence. You can submit it online, by mail, or in person. The form requires you to state that a final tax return has been or will be filed with the FTB. Important considerations: If all members vote to dissolve, you can file just the Certificate of Cancellation (Form LLC-4/7) without first filing a separate Certificate of Dissolution. An LLC is not legally terminated until the Certificate of Cancellation is filed and accepted by the Secretary of State. Note: Failing to formally dissolve your LLC means it continues to exist legally and will remain liable for the annual $800 franchise tax, plus penalties and interest. You must pay all creditors before distributing any remaining assets to members. This is general information and does not constitute legal advice. For complex situations involving significant debts, assets, or member disputes, consult with a qualified California attorney and a tax professional.