How to close a California business entity | FTB.ca.gov

Business entities doing or transacting business in California or registered with the California Secretary of State (SOS) can dissolve, surrender, or cancel when they cease operations in California and need to terminate their legal existence here.

  • Domestic corporations (those originally incorporated in California) may legally dissolve.
  • Foreign corporations (those originally incorporated outside California) may legally surrender.
  • Limited liability companies and partnerships (both domestic and foreign) may legally cancel.

Steps to dissolve, surrender, or cancel a California business entity

Dissolving, surrendering, or canceling a California business entity is a multi-step, multi-state agency process that has requirements with us and SOS.

Requirements for FTB

The business entity must:

  • File all delinquent tax returns and pay all tax balances, including any penalties, fees, and interest.
  • File the final/current year tax return. Check the applicable Final Return box on the first page of the return, and write “final” at the top of the first page. All tax returns remain subject to audit until the statute of limitations expires.
  • Cease doing or transacting business in California after the final taxable year.

Requirements for SOS

The business entity must:

  • File the appropriate dissolution, surrender, or cancellation form(s) with the SOS within 12 months of filing the final tax return.

If the business entity is suspended or forfeited, it will need to go through the revivor process and be in good standing before being allowed to dissolve, surrender, or cancel. To revive a suspended or forfeited business entity each of the following must be done:

  • File all delinquent tax returns.
  • Pay all delinquent tax balances, including penalties, fees, and interest.
  • File a revivor request form.

For more information on how to revive a suspended or forfeited business entity go to our revivor webpage.

Additional steps

There are some additional steps that may need to be taken while closing a business entity.

  • Notify all creditors, vendors, suppliers, clients, and employees of the intent to go out of business.
  • Close out business checking account and credit cards.
  • Cancel any licenses, permits, and fictitious business names.
  • Consider publishing a statement in a local newspaper of general circulation near the principal place of business that the business entity is no longer in business.

Additional resources

Here are some additional resources that are available for more information: