Is the $800 franchise tax board fee required for CA LLC that do not earn any income such as a shelf LLC or a startup?
Any way to lawfully avoid paying this for non income generating LLC's?
4 Attorney Answers
Best Answer
Although you have received excellent advice from the other attorneys, even the FTB admits on its website that "In general, all the owners (members) are shielded from individual liability for debts and obligations of the LLC."
So, the FTB will send you countless notices that the LLC must pay the $800 LLC minimum tax, but in fact you are not personally liable for same and can ignore the notices. However, there are some exceptions but I do not think any of them apply based on the facts provided. Good luck!
So, the FTB will send you countless notices that the LLC must pay the $800 LLC minimum tax, but in fact you are not personally liable for same and can ignore the notices. However, there are some exceptions but I do not think any of them apply based on the facts provided. Good luck!
California LLCs do not pay income tax but they are subject to the $800 annual tax (and a fee). Further, All LLCs (not classified as a corporation) that are doing business in California, or file an article of organization or certificate of registration with the Secretary of State must file Form 568, Limited Liability Company Return of Income, pay the annual minimum franchise tax of $800, and LLC fee (if applicable). For more info see the link below:
https://www.ftb.ca.gov/businesses/bus_structures/LLcompany.shtml#filing_guidelines
https://www.ftb.ca.gov/businesses/bus_structures/LLcompany.shtml#filing_guidelines
Yes. In California, LLCs classified as disregarded entities or as partnerships are subject to an $800 annual tax. This applies if the LLC does business in California or if the Secretary of State accepts the LLC's Articles of Organization (LLC-1) or Application for Registration as a Foreign Limited Liability Company (LLC-5). LLCs organized or registered in California are subject to the annual tax even if the LLC conducts absolutely no
business in California. (CA Revenue & Taxation Code section 17941(b)(1)).
business in California. (CA Revenue & Taxation Code section 17941(b)(1)).
The previous attorneys all have answered well - make sure you pay the $800 or you may run into an issue with the Federal Tax Board suspending your companies right to operate within California until they are paid. Sometimes if you dissolve the LLC (which it does not sound like you will) you can petition the FTB for a refund, but it seems to be unlikely in this situation.