To dissolve an LLC in California, the members vote to wind up, file a Certificate of Dissolution and a Certificate of Cancellation with the Secretary of State (or a single short-form filing if the LLC qualifies), pay off creditors and distribute what’s left in the order the statute requires, and file final tax returns with the Franchise Tax Board and the IRS. There is no state filing fee for the dissolution or cancellation forms, but the $800 annual franchise tax keeps running until the cancellation is accepted, so the calendar matters as much as the paperwork.
Get the Member Vote
Nothing goes to the state until the owners formally agree to shut down. Under California Corporations Code Section 17707.01, at least 50 percent of the voting interests must approve dissolution, unless the operating agreement or articles of organization set a higher bar.1California Legislative Information. California Code CORP – Section 17707.01 Check those documents first. The statute also recognizes dissolution triggered by an event written into the operating agreement or articles.
Record the vote in meeting minutes or a written consent signed by the members. You don’t submit it to the Secretary of State, but you’ll want the paper trail if anyone challenges the wind-up later.
File With the Secretary of State
Most California LLCs use a two-step filing: one form to start winding up, a second to end the LLC’s legal existence. A single short form is available for very new LLCs that never did any business.
Certificate of Dissolution — Form LLC-3
Form LLC-3 tells the Secretary of State the members have voted to dissolve and the LLC is beginning to wind up. You’ll need the LLC’s exact legal name and the 12-digit entity number assigned when it was formed.2California Secretary of State. Business Search – Frequently Asked Questions Filing LLC-3 does not end the LLC. It opens the winding-up period.
Certificate of Cancellation — Form LLC-4/7
After winding up is finished, Form LLC-4/7 cancels the LLC and ends its legal existence. This is the filing that stops future franchise tax from accruing. Until LLC-4/7 is filed and accepted, the LLC is still on the books and the $800 annual tax keeps running.
Short Form Cancellation — Form LLC-4/8
If the LLC was formed within the past 12 months and never conducted business, it may qualify to combine dissolution and cancellation into a single Form LLC-4/8, skipping LLC-3 altogether.3Justia. Instructions for Completing the Short Form Certificate of Cancellation Form LLC-4/8 The requirements: at least 50 percent of the voting interests approve, the LLC has no outstanding debts other than the final tax return obligation, and the filing happens within 12 months of when the articles of organization were originally filed.4California Legislative Information. California Code CORP 17707.02
How to Submit the Forms
The fastest route is the Secretary of State’s bizfile Online portal.5California Secretary of State. bizfile Search for your entity by name or number and select the appropriate termination option. Paper forms with original signatures can also be mailed to the Sacramento office. Online filings currently process within a couple of business days; mailed submissions take roughly one to two weeks based on current backlogs.6California Secretary of State. Current Processing Dates There is no filing fee for LLC-3, LLC-4/7, or LLC-4/8. A certified copy costs extra.
Wind Up: Pay Creditors, Distribute Assets
Between LLC-3 and LLC-4/7, the LLC has to settle up. Skipping steps here is what turns a clean dissolution into personal liability later.
Notify Known Creditors in Writing
California law requires the people winding up the LLC to mail written notice to every known creditor whose address appears in the company’s records.7California Legislative Information. California Code CORP – Section 17707.04 Proper notice starts the clock on the creditor’s window to submit a claim and protects members from being pursued for debts after the LLC is gone. Keep copies of everything you send.
Follow the Distribution Order
California sets the order for distributing remaining assets. Creditors get paid first. Members then receive the return of their capital contributions. Anything left goes to members in proportion to their distribution rights.8California Legislative Information. California Code CORP – Section 17707.05 Paying members before fully satisfying creditors can expose those members to personal liability up to the amount they received. Limited liability doesn’t cover a distribution that broke the rules.
Keep the Bank Account Open Until the End
Leave the LLC’s business account open until every debt is paid, every final tax payment has cleared, and every member distribution is complete. Closing it early creates problems when a straggler check or a final tax payment needs to move. Once the last item clears, close the account and keep the final statement.
Close Out With the Franchise Tax Board
Filing with the Secretary of State is only half of it. The Franchise Tax Board has its own closing requirements, and missing them is the most common way a California LLC dissolution goes wrong.
The $800 Annual Tax Keeps Running
Every California LLC owes an $800 annual franchise tax for each year it exists, including its final year.9Franchise Tax Board. Limited Liability Company The tax accrues until the cancellation is filed and accepted. Vote to dissolve in November, drag your feet, and file the cancellation in February? You owe another $800 for the new year. That’s the reason to move quickly once the decision is made.
Revive First if the LLC Was Suspended
If the FTB has suspended or forfeited the LLC for unpaid taxes or unfiled returns, the Secretary of State won’t accept dissolution paperwork until the LLC is revived. Revival means filing all delinquent returns, paying every outstanding balance with penalties and interest, and submitting a revivor request to the FTB.10Franchise Tax Board. Closing a California Business Entity Multi-year suspensions with compounding penalties get expensive fast.
File a Final Form 568
The LLC must file a final Form 568 for its last taxable year. Check the “Final Return” box on the first page and write “final” at the top.11Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet For LLCs classified as partnerships, the return is due by the 15th day of the third month after the close of the taxable year. Pay the $800 with this return if you haven’t already. The LLC must stop conducting business in California after the final taxable year.10Franchise Tax Board. Closing a California Business Entity
File Final Federal Returns
The Final Income Tax Return
Most multi-member LLCs are taxed as partnerships by default and must file a final Form 1065 with the IRS. Check the “Final return” box on page one.12Internal Revenue Service. Instructions for Form 1065 The return covers all income and expenses through the date operations ceased. A single-member LLC that reports on Schedule C of the owner’s personal return files a final Schedule C instead.
If the LLC elected corporate tax treatment, different rules apply: those LLCs must file IRS Form 966 within 30 days of adopting the dissolution resolution, plus a final corporate income tax return.13Internal Revenue Service. About Form 966, Corporate Dissolution or Liquidation Form 966 does not apply to LLCs taxed as partnerships.
Final Employment Tax Returns
If the LLC had employees, file final versions of the employment tax returns. That means a final Form 941 for the quarter in which you paid the last wages, due by the end of the month following that quarter.14Internal Revenue Service. Employment Tax Due Dates A final Form 940 (federal unemployment) is due by January 31 of the following year. Mark every return “final” so the IRS closes the accounts.
Deactivate the EIN
The IRS cannot cancel an EIN, but it will deactivate the associated business account. After all returns are filed and taxes paid, send a letter with the LLC’s EIN, legal name, address, and the reason for deactivating. Mail it to the IRS at either MS 6055, Kansas City, MO 64108, or MS 6273, Ogden, UT 84201.15Internal Revenue Service. If You No Longer Need Your EIN
Keep the Records
Dissolving doesn’t mean you can shred the files. The IRS requires general tax records for at least three years after filing the return, or six years if more than 25 percent of gross income went unreported.16Internal Revenue Service. Topic No. 305, Recordkeeping Employment tax records have a four-year retention period measured from the date the tax was due or paid, whichever is later. The Franchise Tax Board can audit filed returns until its own statute of limitations runs.10Franchise Tax Board. Closing a California Business Entity
Beyond tax paperwork, hold onto the operating agreement, the dissolution vote documentation, creditor notices with proof of mailing, and the filed certificates from the Secretary of State. If someone surfaces years later with a claim, those records are your evidence that the LLC wound up properly and paid out in the correct order.