Legal Question in Business Law in California

Re: disolution of a corporation

Typically, a corporation would file with the Secretary of State a Certificate of Election to Wind Up and Dissolve. However, since you're the sole shareholder, no action is necessary. The corporation will be suspended if you don't pay the next round of corporate taxes. I assume there are no creditors, so that should not be a problem.

Re: disolution of a corporation

Go to the department of corporations or Secretary of State web sites and get the form Certificate of Election to Windup and Dissolve a Corp.. File that with the Secretary of State immediately. Remember, you must be paid up and state corporate taxes to the Franchise Tax Board in order to be able to windup and dissolve. If you do nothing while your corporation would be suspended on a yearly basis that tax requirement would still be in place so that you will all a minimum of $800 for each year. Under normal circumstances individual's liability for corporate debts do not exist but as to tax requirements they do and therefore you would be personally liable. The forms are very easy to complete, free to file and make sure you get endorsed file copies of the form.

Re: disolution of a corporation

A lawyer would never advise a client to get rid of an unwanted corporation by simply turning his back on it and letting it fall into 'suspended' status, but the fact is that this is exactly what happens 90% of the time -- rather than pay the $800 a year minimum franchise tax, founders just do nothing. I have never heard of any action being taken against a suspended corporation or it officers or owners if there are no debts other than franchise taxes.