Legal Question in Business Law in California

Re: How to dissolve a california llc

You can certainly act for the LLC to formally dissolve it with the state and feds, wind down it's affairs and distribute its assets. As long as the 'partner' doesn't sue you, it's over. Feel free to contact me if you need legal help doing so.

Re: How to dissolve a california llc

There are two somewhat related but also quite dissimilar aspects of closing down an LLC. Dissolving it is a largely formal, legalistic step accomplished by filing certain papers with the Secretary of State, but if you get the impression from an earlier answer that this is a mechanical slam-dunk that you assuredly have the right to do on your own, let me express my differing view that it is not at all just a matter of filling in a form, although filling in one or two forms are PART of the process. I have seen several attempted "dissolution" filings rejected by the Secretary of State for a variety of reasons, including lack of authority of the single LLC member making the filing to dissolve the LLC without someone else's concurrence. There are other reasons for rejecting the dissolution papers as well, including failure to specify how the soon-to-be former LLC's bills will be paid. Yup, they want to know that.

That leads to the second aspect of terminating the existence of an LLC. Many LLC participants get the false impression that when the Secretary of State finally accepts your paperwork and labels the LLC as "dissolved," that that is the end of the story. Not so. Dissolving an LLC terminates its existence insofar as continuing operations as a going business are concerned, but the dissolved LLC CONTINUES TO EXIST for purposes of winding up its affairs, liquidating its assets and paying is bills, and during this winding-up process can sue and be sued. To the extent the LLC may own real property it hasn't liquidated and disposed of, its existence is perpetual.

The bottom line is that terminating an LLC can be tougher than starting one. You may not need a lawyer, especially if you can cooperate on the Secretary of State filings (check the Web site at www.ss.ca.gov and go to the business portal and look for LLC forms to find dissolution forms and instructions), but you will soon see why many failed LLCs are abandoned by their founders rather than being shut down formally. I don't recommend this, but many get away with it, especially if their are no creditors, no assets and no one really cares.