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Formally dissolving a business

Posted by taxguru on August 8, 2012

From Blog Pix

A huge expensive mistake people often make is assuming they can just close up their corporation’s bank account, walk away and that’s the end of it.  That’s not enough to satisfy the authorities, especially in the PRC. 

Until all of the proper official forms are filed and accepted by the Secretary of State’s office, that entity is technically still alive and has to pay all of the related taxes, including California’s $800 per year minimum tax.  Penalties and interest make that balance grow quite quickly.

Even if you’ve left the original state, that’s no security against being pursued for the delinquent taxes and penalties.  I have seen plenty of cases where fellow California refugees have been hounded by the FTB in other states, including here in the Ozarks.  The FTB aggressively pursues taxes all over the world.

I mention this because there is a good article in the FTB’s latest issue of TaxNews on how to properly wrap up a defunct business:

A Guide to Formally Terminate a Business Entity’s Legal Existence

This article from the previous month’s TaxNews is also very illustrative of the large amounts of money at stake for not properly dissolving a business entity.

Suspended/Forfeited Business Entities Revivors

 

TaxCoach Software: Are you giving your clients what they really want?

 

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