Legal Question in Administrative Law in California

Re: Personal Assets

Let me make three comments based on experience and not necessarily the law or policy:

First, I have never known the FTB to pursue the collection of the minimum annual franchise fee (currently $800) from either a corporation or its owners when they shut it down and walk away from it. The worst punishment I have ever seen is that the corporation is suspended (loses its powers). I can't say that everyone's experience is the same as mine.

Second, if the debt the corporation does not pay is "trust funds," for example, taxes withheld from employees, the IRS has the power, and uses it, to collect the money from individuals associated or formerly associated with the corporation. This is called the "100% penalty." I do not know if the State of California has similar powers, but I would be surprised if it did not. Therefore, I would say the FTB very well might levy or lien the personal property of the officers, directors or others whose actions or inactions caused the corporation to misappropriate the withheld trust funds and could use garnishment as well.

My third point is that this is based on observation and experience rather that really knowing what the law or policy is, and even if I have observed it accurately, it is subject to change.

Re: Personal Assets

Are you sure that it is the FTB and not the Department of Corporations? You should call both to see what their policy is, but I assume it is probably just to drop your corporation as being registered.