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 Gearing up for LLC suspension´┐Żprogram

The Franchise Tax Board (FTB) and Office of the Secretary of State (SOS) are currently working together to implement a suspension/forfeiture process for Limited Liability Companies (LLCs).

In early 2009, FTB will begin to suspend/forfeit the rights, powers, and privileges of LLCs for non-payment of taxes, penalties, or interest, and/or failure to file a return (Revenue and Taxation Code Sections 23301, 23301.5 and 23304.1(d)). This action will help FTB bring LLCs into compliance and reduce the tax gap.

Implementing the suspension/forfeiture process will have a dramatic effect on LLCs that have failed to meet their filing and payment obligations. We will send notification to all entities at their last known addresses, 60 days before imposing suspension/forfeiture.

Non-registered LLCs acting and filing in California will be subject to contract voidability. The reasons for contract voidability are the same as for suspension/forfeiture: failure to file a return, and/or failure to pay taxes, penalties, or interest.