This practical guide is for Hyke clients who need to close down their California LLC (due to moving to a new state, for instance) while remaining in Hyke system.

When closing down your California LLC (or SCorp), there are legal and financial steps to take. We'll be there to support you during this process with financial steps, but since we are not a law firm, we highly recommend you to work with a lawyer for the legals. If you need an introduction to California lawyer, please let us know on your Slack channel.

Keep in mind that this article is intended to be a practical guide, not legal or financial advice. If you're curious about the details, you can find an extensive article here.

Legals

There are typically 7 legal steps to closing a California LLC (applies to S Corps as well). For most of these, we recommend you to work with a lawyer. For an experienced lawyer, these should typically take 1-2 hours.

1. Sign a written Member's resolution approving the cancellation of the LLC

If you have a SM-LLC (single member LLC, that's most likely you), there’s no need for a formal member vote on dissolution. Phew!

But if you somehow ended up adding one or more members to your LLC (Multi-member LLC), you have to vote to dissolve your LLC with other members. If that's the case, we highly recommend that you work with a lawyer.

2. File a certificate of cancellation with the Secretary of State's Office

You should legally terminate your LLCs existence by filing a termination document with the California Secretary of State.

There are several termination forms but most of the time, it'll be the Certificate of Cancellation (Form LLC-4/7) you'll need to use. You simply fill out the form and then print it out. Heads up: Make sure to use Form LLC-4/7, not the short form LLC-4/8, as the latter is only for LLCs that haven’t conducted any business.

For this step, we recommend that you work with a lawyer.

3. Notice of Dissolution To Creditors

Do you have any creditors? Then you should provide them with notice of when claims must be submitted for payment to be considered. Some examples of creditors:

  • Suppliers that provide you with inventory and materials
  • Banks
  • Lenders
  • Service providers
  • Your landlord
  • Utility companies 

There is no official notice form and California’s LLC law doesn’t require that you send such notice by certified mail. But if you have doubts, we highly recommend that you work with a lawyer to figure this out.

4.  Discontinue Registered Agent For Service Of Process Services

When closing down your LLC, it's important to notify your registered agent for service of process, so that you do not continue to get charged for the service.

Good news: We'll take care of this for you, so no action point on your end :)

5. File Declaration Of Closed Business With The City

Your LLC should be registered with a city and most cities require that the business registration be inactivated. Otherwise, they may continue billing your business for annual license fees. 

The procedures for doing this vary from county to county and city to city. If you got your business license DIY, check your county or city website for details. If you worked with a lawyer or another service (i.e CSC, or License Logix) to get your business license, we recommend that you reach out to them and learn your options.

6.  Cancel Any Other Licenses And Permits.

If you have any any additional licenses or permits, such as your California Seller’s Permit and cancel your registration with the Employment Development Department.

The procedures for doing this vary from county to county and city to city. If you got your business license DIY, check your county or city website for details. If you worked with a lawyer or another service (i.e CSC, or License Logix) to get your business license, we recommend that you reach out to them and learn your options.

7.  File An Abandonment Form For Your Fictitious Business Name Statement.

Did you get a DBA (Doing Business As) for your business? Most jurisdictions require you to file a form notifying the government that you will no longer be using the fictitious business name. For example, in San Francisco a company would need to file a Statement Of Abandonment Of Use Of Fictitious Business Name Statement.

The procedures for doing this vary from county to county and city to city. If you got your DBA DIY, check your county or city website for details. If you worked with a lawyer or another service to get your business license, we recommend that you reach out to them and learn your options.

Financials

Here are the list of things you'll need to do:

  1. Collect money from people who owe you money
  2. Pay off all your debts
  3. Distribute assets, if any
  4. Cancel insurance, lease or other services you may have 
  5. Cancel your credit cards, close your bank accounts
  6. File your final state and federal taxes

Filing final state and federal tax returns are the most important step when closing down a business. Since you'll remain with Hyke, your Hyke tax team will help you with these and there's no action point for you :)
 

If you'd like to learn more about the details of closing down an LLC in California, you can find an extensive article here.

If you have any questions or concerns, let us know on your Slack channel! 

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