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LLC pending cancel status converted to canceled

PURPOSE OF BULLETIN

To inform staff of an agreement between the Secretary of State (SOS) and the Franchise Tax Board on changing the status of certain Limited Liability Companies (LLCs) from “pending cancel” to “canceled,” with authorization to issue 2006 annual tax refunds in certain situations.

BACKGROUND

Before September 29, 2006, LLCs that had successfully submitted their cancellation documents to the SOS received a status of “pending cancel.” Per SOS records, there are approximately 15,845 of these entities that were unable to have their status changed to “canceled” for various reasons. SOS and FTB have reached an agreement that if FTB is satisfied that certain requirements are met, SOS will convert certain LLCs statuses to “canceled.”

SPECIFIC PROVISIONS

For SOS to change the status of certain LLCs from “pending cancel” to “canceled” all of the following requirements must be met:

  • The LLC previously filed a timely final annual tax return.
  • The SOS had given the LLC a status of “pending canceled.”

Note: The “pending canceled” status of an LLC that filed its final return after 11/15/06 will not be converted to “canceled.”

The status of an LLC that does not meet the above requirements will remain “pending cancel.” The status of “pending cancel” is considered an active status. Taxpayers with questions that fall in this category should contact the SOS at (916) 657-5448.

ANNUAL TAX REFUND

LLCs that meet the above requirements and paid the 2006 annual tax may be eligible for a refund of the annual tax consistent with the implementation of AB 2341.

 

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