Administrative dissolution program December 2019 Tax News
We established the administrative dissolution program on January 1, 2019. Within this Program, there are two administrative dissolution pathways to dissolve or cancel a business entity. The first, allows a qualified domestic corporation or qualified domestic limited liability company (LLC) the ability to request the voluntary administrative dissolution/cancelation of the business entity. The second pathway allows us to initiate the administrative dissolution/cancelation process for those business entities that have been suspended by us for 60 or more consecutive months. In prior Tax News articles, published in November 2018 and July 2019, we provided information on the voluntary administrative dissolution/cancelation process.
Beginning on January 1, 2020, we will initiate the administrative dissolution/cancelation of qualified entities that have been suspended by us for 60 or more consecutive months. If a qualified entity is still engaging in a business activity or has assets in the business name and receives the Intent Notice (reference notices below), the qualified entity has 60 days to provide us with a written objection to the pending administrative dissolution/cancelation.
Prior to administratively dissolving/canceling a qualified business entity, the following steps are required:
- We will mail notification of the pending administrative dissolution/cancelation to the entity’s last known address. The notices below provide instructions on how to submit the written objection to us.
- FTB 5125 C, Administrative Dissolution - Intent Notice for Corporations
- FTB 5126 C, Administrative Cancelation - Intent Notice for LLC’s
- We will provide a list to the Secretary of State (SOS) of the business entities that are pending administrative dissolution/cancelation.
- SOS will post on their website the list of business entities pending the administrative dissolution/cancelation for 60 days in order to allow ample time for objection. This includes the legal name and SOS file number of the business entity.
If a timely written objection is received within 60 days, the entity has 90 days from receipt of the objection to revive their business entity. The entity is required to:
- File all tax returns
- Pay all taxes, fee, penalties, and interest
- File a current Statement of Information with the SOS
- Fulfill any other requirement with the SOS
- File a Request for revivor
If the entity is revived by complying with the above requirements, the administrative dissolution/cancelation will be withdrawn, and the entity will be restored to good standing with us.
If the entity does not revive within the time frame, nor provides a written objection within 60 days, the entity will be administratively dissolved/canceled.
Go to our Voluntary administrative dissolution/cancelation page for additional information.