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  1. #1
    Join Date
    Mar 2010
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    2

    Default State Trying to Collect Back Taxes from a Dissolved LLC in California

    My question involves business law in the state of: California

    The state is trying to collect $800 (which is the minimum tax for LLC's each year in CA) from 2008 from me, on an LLC that was dissolved in early 2009, even though the company never made any money.

    Am I on the hook (as one of the owners) to pay this, or does the LLC and the fact that it is dissolved protect me and my personal assets/credit from having to pay this?

    Thanks!

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
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    Default Re: State Trying to Collect Back Taxes from a Dissolved LLC in California

    You're on the hook.

  3. #3
    Join Date
    Mar 2010
    Posts
    2

    Default Re: State Trying to Collect Back Taxes from a Dissolved LLC in California

    I was told just the opposite.

    Over the weekend I spoke with and attorney here in Ca as well as a CPA and they both said that I could not be held liable. They said that only the corp could be held liable and if the corp is dissolved they can't come after any of the owners/partners.

  4. #4
    Join Date
    Mar 2010
    Posts
    4

    Default Re: State Trying to Collect Back Taxes from a Dissolved LLC in California

    LLC or Limited Liability Company is just that, Limited. This rule applies with C type, S type corporations and LLCs . When any of these are incorporated they are essentially become like a living legal entity like a person. It's the protection nessesary that in the case that something goes wrong only your business is responsible, but you are not. In other words you are right, and they cannot come after your business cause it no longer exists.

  5. #5
    Join Date
    Mar 2009
    Location
    Key West, FL
    Posts
    2,350

    Default Re: State Trying to Collect Back Taxes from a Dissolved LLC in California

    Actually, an LLC is NOT a corporation. It is not a separate legal entity. It is a "Limited Liability COMPANY". It is a partnership with third party liability protection. A lot of people do not realize this.

    Board members of a corporation are personally liable for FICA that is not paid and can be held liable for unpaid employee withholding. There are other things where you can be personally liable.

    Also, in most states, even corporations can be sued after they are dissolved for up to two years. Anyone in that situation who got a distribution of assets from the corporation would have to give them up if the corporation lost.

    One interesting example, here in Florida I am suing an LLC and its individual partners. The main defendant is a newspaper that is a dba of the LLC. However, the dba was expired for 3 years, including while the torts were happening. Thus, the dba was NOT owned by the LLC, it was owned directly by the three partners. They are all personally liable, including being liable for the punitive damages. What seems like a little mistake can have big consequences.

    Five lawyers tried to tell me and the judge I was wrong, but I was not and the judge didn't go for their bs.

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