how to handle defunct LLCs?

I was gonna reply on the other thread, but will do so here.

To dissolve a corpoation there is a form DISS STK at page 5 of

3 says has 5 checkboxes and I guess you must pick one. BEGIN QUOTE

[ ] The corporation's known debts and liabilities have been actually paid. [ ] The corporation's known debts and liabilities have been paid as far as its assets permitted. [ ] The corporation's known debts and liabilities have been adequately provided for by their assumption and the name and address of the assumer is __________ [ ] The corporation's known debts and liabilities have been adequately provided for as far as its assets permitted. [ ] The corporation never incurred any known debts or liabilities.

END QUOTE

So I guess you can check the sec BEGIN QUOTE

TAX LIABILITY (The following statement should not be altered.)

1. A final franchise tax return, as described by Section 23332 of the Revenue and Taxation Code, or a final annual tax return as described by Section 17947 of the Revenue and Taxation Code, has been or will be filed with the Franchise Tax Board, as required under Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code.

END QUOTE

Nothing is said about the payment of tax with the final return. But I'm sure they can use the assets to satisfy the final tax.

Now that we have a feel for the general case in which LLC members are not personally liable for LLC fees, what would be the prudent thing to do to close a defunct LLC, either promptly or after a couple years of neglect?

I would think file the necessary documents, including a final LLC return for the first year it went defunct, with a cover letter saying LLC has no money, but here you go - wipe it off the books. I doubt that would be construed as the filer taking personal responsibility.

What do you think? ====================== As LLCs are disregarded entities for tax purposes, this is not a tax problem.

"removeps-groups" wrote

You guys are talking CA tax issues, but here in Georgia unpaid state taxes attach to the assets. As such, a client received a letter a couple of years after they bought "the business" in an asset purchase. State said their lien attached to the purchased assets. Client said she was pushing them out the door, they'll be on the back porch, come get them. State didn't want the stuff, it wanted cash.

I suspect it's the law everywhere that creditors take preference over shareholders/members. So if a corporation/LLC has assets that go to shareholders/members, the shareholders will be liable to creditors for the value of what they got.

My original question had to do with an LLC that went out of business without ever having taken in any money or property.

___ Stu