California LLC formed in 2002 - no business activity or expense - do we still owe the tax?

Asked by: Mike C.  — 30 August, 2012

Wife and I formed a California LLC in 2002 but quickly abandoned the idea of so no activity was ever conducted with the business. Do we personally owe the taxes if no business or expenses were ever incurred? Any recommendations, we don’t have the means to pay 8k for something that was never used but not sure what are options are? Also, does this prohibit us from ever creating another California LLC in the future?

Answered by: admin  — 30 August, 2012


I do not believe you would be personally liable for the annual $800 franchise tax. As the business would be liable for the tax, typically when a company fails to comply with timely payment, the company is suspended within the first 2 years. After 10 years, there is a possibility the company has been dissolved by the state.

I am not 100% certain whether or not it would restrict you from opening a new company in the state, but my best guess is – it wouldn’t. My suggestion would be to check with a business attorney licensed in the state of California.

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