Winding Down an LLC in California

Rex Halverson

A funny thing happened to me as I tried to wind down the affairs of an old LLC on 12/16/15.  I began my day by pulling up the form LLC-4/7, Certificate of Cancellation of a Limited Liability Company on the Secretary of State’s website and filling it out online. I then mailed it in.

Two weeks later, I received a form letter in response from the Secretary of State (Business Programs Division) returning my LLC-4/7 and my $1 check and the following note:  An incorrect or outdated LLC-4/7 was used. New form enclosed.

Now, this is the funny part…the new form LLC-4/7 is IDENTICAL to the old one except for the revised date of 01/2016 and a website address. I was speechless! Why was the old version of the form on the Secretary of State’s website? Why would a taxpayer submit a form revised 01/2016 when they are cancelling an LLC in 2015?  Moreover, why would a taxpayer have to resubmit an IDENTICAL form as the old one? What a waste of time, energy and postage? Why not just file the old form, deposit my check into state coffers and call it a day? What has happened to common sense?

A few days later I started getting emails from taxpayers complaining about the same issue. All are worried that the FTB may both require them to file a 2016 tax return and pay the $800 minimum tax for yet another year.

Now I know why no one can get through to the FTB via the telephone help desk number to ask a simple question. The Secretary of State’s Office is doing the FTB and California business owners no favors! That’s my two cents…