Source: http://www.carsonkyung.com/dissolving-llc/
Timestamp: 2020-07-11 07:45:48
Document Index: 750984789

Matched Legal Cases: ['§17707', '§17707', '§17707', '§ 17704', '§ 17707', '§17707', '§17707', '§17707', '§ 17707']

Dissolving an LLC with a Sacramento Business Lawyer
HomeBusinessDissolving an LLC
Unfortunately, businesses fail and owners separate. Doors close for a variety of reasons. Once the doors close, owners should be mindful to dissolve the LLC. Failure to dissolve the LLC could result in accumulating franchise tax board fees of $800 per year. That will add up quickly. Dissolving an LLC is the official way of shutting down a business with the Secretary of State.
Events Triggering Dissolution
There are several events that may trigger dissolving an LLC.
The operating agreement sets forth specific triggering events that will dissolve the LLC. For example, an LLC is organized for the sole purpose of buying a certain commercial real estate building. Subsequently, the LLC fails in it’s bid to acquire the commercial real estate building. Hence, there is no longer a need to keep the LLC operating. This type of situation can be outlined in the LLC’s operating agreement and immediately trigger dissolution of the LLC. Corp C §17707.01.
A vote of the members can also trigger dissolution of an LLC. Corp C §17707.01.
By other various means, such as a court judicial dissolution or the LLC has no members. Corp C §17707.01. A judicial dissolution occurs on petition of an LLC member alleging the LLC was abandoned, the management is deadlocked, there is fraud or abuse of authority, along with a few other reasons for judicial dissolution.
Winding up is the process of closing the business. Typically, a manager or member of an LLC will be responsible for winding up the business. The assigned manager or member has a fiduciary duty to the other members. Corp C § 17704.09. They must complete a series of tasks, including the following:
Give written notice of the commencement of winding up by mail to all known creditors and claimants whose addresses appear on the records of the limited liability company, Corp C § 17707.04;
Pay all of the LLC’s debts, Corp C §17707.05; and,
File the certificate of dissolution with the Secretary of State, Corp C §17707.08.
Depending on the size of the LLC, some entities retain an attorney to draft a dissolution and winding up agreement. This agreement outlines appointment of the liquidating member, distributions, payments to creditors, how records will be retained, obligations of members, and much more. Our Sacramento business lawyers have extensive experience with LLCs and dissolution. Contact our office if you’d like to schedule an initial meeting with our of our attorneys.
A short form cancellation is the quickest and easiest way to dissolve an LLC. This form is used when the LLC has essentially not started operating. Upon canceling an LLC, the powers, rights, and privileges of the LLC immediately cease. Corp C §17707.02(c). An LLC may file this form if the following requirements are met:
1) Form LLC-4/8 is being filed within twelve (12) months from the date the Articles of Organization were filed with the Secretary of State;
2) The LLC has no debts or other liabilities (other than tax liability);
3) The known assets of the LLC remaining after payment of, or adequately providing for, known debts and liabilities have been distributed to the persons entitled thereto or no known assets have been acquired;
5) The LLC has not conducted any business from the time of the filing of the Articles of Organization;
6) A majority of the managers or members, or if there are no managers or members, the person or a majority of the persons who signed the Articles of Organization, voted to dissolve the LLC; and
7) If the LLC received payments for interests from investors, those payments have been returned to those investors. (Corporations Code § 17707.02)
If an LLC qualifies for this type of cancellation, our Sacramento business lawyers will typically print this form out during the initial meeting. Hence, our lawyers will not charge you for advice on simple dissolutions that can use form LLC-4/8.
Certificate of Cancellation (Form LLC-4/7) and Certificate of Dissolution (Form LLC-3)
A Certificate of Dissolution Form LLC-3 is filed when not all of the LLC members agree to dissolution. This form must also be accompanied with a Certificate of Cancellation Form LLC-4/7. The forms themselves are rather self explanatory and even include an instructions page. If an LLC has questions, our Sacramento business lawyers are available for an in person consultation to discuss the forms. If not all of the LLC members agree to dissolution, there may be alternatives to dissolving the LLC or a dissolution and winding up agreement may be necessary. Our business lawyers are available to help with all business needs, including dissolving an LLC.
Contact Sacramento’s Business Lawyers
Dissolving an LLC is typically not the happiest experience for most businesses. Our Sacramento business lawyers are available to help throughout the entire process. Our attorneys draft dissolution and winding up agreements. Our lawyers can also mediate internal business disputes and work on alternative measures to dissolution.
If you’re interested in discussing dissolution, please contact Sacramento’s business attorneys to set up an initial meeting.
*The information provided in this post does not constitute legal advice or opinion. The information is for guidance purposes only. Individual situations vary and you should contact us for a consultation. Sacramento’s Business Lawyers Dissolving an LLC.
business attorneydissolutiondissolution and winding up agreementdissolution and winding up agreementsDissolving an LLCLLC dissolutionsacramento business attorneysacramento business lawyerwinding up