What does an inactive LLC mean?
What is an inactive business status? When a company has an inactive business status, this means that it still exists in the eyes of the law but that it has no activity taking place. It could also mean that it has had no business transactions take place in a particular year.
Can you use a business name if it has been dissolved?
If you have done your due diligence, you can confirm that the company of the name you want has been dissolved, the name is not active in any other states or trademarked federally, and the company who was the original holder of the name was not one that is going to paint your company in a bad light by using the name.
How do I dissolve an inactive LLC?
To dissolve, the LLC must settle all outstanding liabilities and divide the LLC’s property among the owners. Then the LLC’s members must complete and submit a statement of dissolution to the secretary of state where the LLC was organized. The statement includes the name of the LLC and the date it was dissolved.
How long before you can reuse a company name?
If the company has used the name for at least 12 months before the liquidation took place, you may be able to continue to use the name as long as it wasn’t a dormant company during this time. Reusing a company name outside of these three scenarios could have serious ramifications for you and other directors.
Can you walk away from an LLC?
Yes you can dissolve a California LLC that’s been around for less than a year. You will need to file a dissolution form with the secretary of states office and you should also notify the IRS if you obtained a tax ID number for this LLC.
How much does it cost to dissolve an LLC?
There is no fee to file the certificate of dissolution. However, there is a non-refundable $15 special handling fee for processing documents delivered in person at the Sacramento SOS office. It can take the SOS many weeks to process a certificate.
How do I reactivate an inactive LLC?
Reinstating a California LLC requires filing a Statement of Information (Form LLC-12) with the California Secretary of State. Reinstatement with the Franchise Tax Board (FTB) may also be necessary by filing LLC Application for Certificate of Revivor (Form FTB-3557).
What happens when an LLC becomes inactive?
If a company does not remain in good standing while it is inactive, the state may dissolve it and impose penalties. If not dissolved, the company will continue to incur penalties for outstanding taxes. Owners may become personally liable for any outstanding tax liability as a result.
Can a company change its name to avoid debt?
Changing a business name to avoid judgment is risky, as judgment creditors have recourse against both the owners and the businesses involved in changing the name of a business to avoid judgment. This article is for general informational purposes only, and it is not intended as legal advice.
Can I use a company name if it is inactive?
However, if the company is listed as being inactive, then the state may not allow you to use the name unless you are able to provide written consent. Ultimately, it is the responsibility of the state to verify the availability of a company name, so should it turn out that the name is not available, you will be notified as such.
Do you have to file taxes if your LLC is inactive?
A newly formed LLC might not have started doing business yet, and an older LLC might have become inactive without being formally dissolved. But even though an inactive LLC has no income or expenses for a year, it might still be required to file a federal income tax return.
Can I use a company name that has been dissolved?
If the company is listed as dissolved, the name may be available for your use. Note that it’s common for a state to have a waiting period before the name of a company that is inactive or dissolved can be used by another business entity.
What does it mean when a company is inactive or dissolved?
In doing your search of available company names, you may find that a company is cited as either “inactive” or “dissolved.” If the company is listed as dissolved, then the name is generally up for grabs.