By Shauna Krause, President, Capitol Services, Inc.
When you are done, you’re done, but going away may take some added steps for a corporate contractor. Another contractor finds that license transfers only go one way in CA…
Q: Your company helped me set up my Corporation back in 2003. We haven’t done business in California for years and I need to close up the corporation. I noticed that it’s suspended by FTB (Franchise Tax Board). What is the process to shut it down at this point?
A: Before you can close/surrender your corporation, you will first need to get it back in Good Standing with the Secretary of State. You will need to contact the Franchise Tax Board to find out the reason for the Suspension, however it is likely that your company needs to either file back tax returns, pay taxes owed, or both. Contact my office if you need assistance with this. We are here in Sacramento and can visit the FTB on your behalf to determine what’s needed and file the appropriate items to lift the Suspension. Once the Suspension is lifted, you can file to surrender the corporation.
Q: We are an Oregon Limited Liability Company (LLC) and when we originally obtained our California Contractor’s License (in 1995) we had to form a corporation because California didn’t allow LLC’s to have a license. In 2012 when the CSLB started licensing LLC’s, we registered our Oregon LLC in California and transferred our license number over to the LLC. For tax purposes, our CPA has recommended that we convert back to a corporation. I assume we can just transfer the number back to the corporation?
A: Actually, while a corporation (under certain circumstances) can transfer their license number to an LLC, an LLC cannot transfer a license number to a corporation. I believe the statute that allows for a corporation to transfer a license number to an LLC was only established due to the fact that the CSLB didn’t previously license LLC’s. Your corporation will be required to obtain a new license number. Contact our office if you’d like assistance with the process.
Contractor’s Note:We have a new mailing addressbelow to update your contact files!
While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email email@example.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Research past columns at www.cutredtape.com.