Form LLC-3: Everything You Need to Know
Form LLC-3 is the Certificate of Dissolution that will need to be filed if you choose to dissolve your LLC in the State of California. 3 min read
2. What Can Trigger an LLC Dissolution
3. Alternative Methods for Dissolving Your California LLC
4. Steps for Dissolving Your LLC
Form LLC-3 is the Certificate of Dissolution that will need to be filed if you choose to dissolve your LLC in the State of California. Keep in mind that if all members vote to dissolve the LLC, then Form LLC-3 is not required, and the only document to be filed is Form LLC4/7, which is the Certificate of Cancellation.
What Can Trigger an LLC Dissolution
After you’ve determined that you want to dissolve your LLC, you will need to conduct a meeting with all members of the LLC. Once it has been voted on (majority vote), you can then begin the dissolution process.
Next, you will need to submit a written agreement for dissolving the LLC, which must be signed by all members. This agreement will then be filed with the California Secretary of State.
If your LLC drafted an operating agreement at the time of the LLC’s formation, you will need to abide by the process that is laid out in the agreement. A lot of businesses have dissolution provisions within the operating agreement. However, if your LLC doesn’t have an operating agreement (as this document is not required in the State of California for LLCs), then you will simply need to abide by the California state laws in terms of the dissolution process.
There are a few events that could trigger the dissolution of a California LLC, including the following:
• If the LLC sells its property, then it might be required to dissolve (if this is in the operating agreement).
• If an LLC member leaves the business for 90 or more days, the company must dissolve. This could also occur if the owner of a single-member LLC dies.
• If a majority of the LLC owners approve of dissolving the LLC.
Alternative Methods for Dissolving Your California LLC
There are additional methods by which you can dissolve your California LLC without having to fill out Form LLC-3. As previously mentioned, if all members agree to dissolve the LLC, then Form LLC-3 is not required, and Form LLC-4/7 will be filled out and filed instead.
Furthermore, if your business is less than a year old, has no debts aside from tax liability, has returned any investments, hasn’t conducted business since filing the articles of organization, and has had a majority of the members vote to dissolve the LLC, then the company can be dissolved by filing Form LLC-4/8, which is referred to as a Short Form Certificate of Cancellation.
Steps for Dissolving Your LLC
If you are filing Form LLC-3, you will need to identify your company filing number, business name, how and why your LLC is being dissolved, and any other relevant information that you might choose to include. Keep in mind that if not all members approve of the dissolution, you will need to file both Form LLC-3 and Form LLC-4/7.
Submitting these forms must be done by mail. The documents can be mailed to the California Secretary of State’s Office, c/o Document Filing Support, P.O. Box 944228, Sacramento, CA 94244-2280. There is no filing fee. If you choose to deliver the documents in person at the Sacramento office, you will be charged a $15 fee.
Remember that you still must file a tax return for the year in which you dissolve your business. Furthermore, if you have employees working for your LLC, then you must file final employment tax returns while also making final federal tax deposits on such tax returns. When you do submit your taxes, you’ll want to identify that it is the final tax return for the LLC.
After you’ve submitted the necessary documents and submitted final employer tax returns, you should also ensure that your business licenses and permits are canceled. You will also need to cancel workers compensation, healthcare, and unemployment insurance.
You will also need to provide closure notices to all customers, clients, suppliers, bank lenders, and others who you have done business with.
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