Administrative dissolution of domestic corporations and domestic LLCsPublic Service Bulletin

December 27, 2018

Purpose of bulletin

To inform the business and tax professional community there are additional new ways that a qualified domestic corporation or domestic Limited Liability Company (LLC) can resolve income tax liabilities in order to dissolve.

Background

Beginning January 1, 2019, AB 2503 provides that we may administratively dissolve a domestic corporation or a domestic limited liability (LLC), and that we may abate any unpaid qualified taxes, penalties and interest of a dissolved domestic corporation or a cancelled domestic LLC under these specified circumstances:

  • Voluntary administrative dissolution– Authorizes us to abate, upon written request (FTB 3715, corporation or FTB 3716, LLC) 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 within the meaning of subdivision (a) of Section 23101, has ceased doing business, and does not have any remaining assets in the business.
  • Administrative dissolution (involuntary) – Authorizes us to administratively dissolve those qualified entities that are suspended by the FTB, have ceased doing business, have been suspended for 60 or more consecutive months, and have paid all taxes and filed all returns due as of the date the entity ceased doing business.

Additional information

The Franchise Tax Board will implement the bill in two phases.

The first phase is scheduled for early January 2019. We will begin receiving and processing requests (FTB 3715, corporation or FTB 3716, LLC) submitted by qualified entities requesting voluntary administrative dissolution.

The second phase is scheduled for January 1, 2020. We will begin initiating and processing the administrative dissolution (involuntary) for eligible domestic corporations and domestic LLCs that meet specified criteria. Further information on this process will be shared with the business and tax professional community in mid-2019.

Where can i find the application/instructions

Taxpayers or their representatives should visit our public website at ftb.ca.gov for more information and to download the request form (FTB 3715, corporation or FTB 3716, LLC) for voluntary dissolution, or contact us at

Phone
(916) 845-7700

between the hours of 8:00 AM to 5:00 PM weekdays, except state holidays.