Are you a business owner who set up an LLC, but now it’s just sitting there collecting dust?
Maybe you're not using it anymore, or perhaps you’ve shifted focus to other projects.
Either way, your LLC might feel like it's not a priority. But here's the reality check: letting your LLC sit unused could end up costing you more than you think!
While your LLC isn’t earning you any money, it’s still a legal entity—and that means it’s still racking up taxes and fees you might not even realize.
We will be breaking down why it's crucial to deal with your LLC—whether you’re reviving it or officially closing it for good!
Paying California LLC Taxes & Fees: Even If You’re Not Making $$$
California LLCs are required to pay an annual $800 tax fee– yes, every year–even if your business hasn't earned a single penny!
That is money out of your pocket for absolutely no reason.
If you’re not using the LLC and don’t want to pay this bill, you have two options: dissolve it or terminate it. If you let it sit, the fees will keep piling up. Dissolve Inactive LLC
Penalties, Fees, and Suspension
Here’s the worst part: If you don’t pay that annual $800 tax (or fail to file an LLC return), the California Franchise Tax Board (FTB) could suspend your LLC.
Once it’s suspended, you can’t legally operate your business in California. Yikes!
When your LLC is suspended, it’s no longer recognized as a legal entity.
That means any contracts your LLC enters into could become null, and anyone you do business with can cancel your contract without consequence.
3. Watch Out For Lawsuits!
If your LLC is sitting there, inactive and forgotten. But technically it still exists.
If someone decides to sue your LLC—whether due to a past issue or something tied to it—then you could end up in a legal mess.
The lawsuit can proceed even though you thought your LLC was “inactive.”
And if your LLC is not dissolved or terminated properly, it can be a real headache to get out of legal trouble.
You could even be personally liable in some cases if things go south.
4. Hurt Your Credit & Reputation
Your business reputation is more important than you might realize. It’s not just about today—it impacts your future, from investments to loans, or simply keeping your options open.
But if you leave your LLC sitting around as “inactive” or, even worse, suspended, it can seriously hurt your business credit. Imagine trying to launch something new–apply for a business loan, or build a relationship with a potential partner.
An improperly closed LLC could raise red flags for lenders, investors, or partners who check your track record. A neglected LLC can leave a mark on your reputation that's tough to shake off!
Dissolving Your Inactive LLC:
The Resolution You May Need!
So, what do you do if your LLC isn’t making any money, but you’re also not quite ready to say goodbye? Dissolve it!
By properly dissolving or terminating your LLC, you avoid all the unnecessary taxes, fees, and headaches that come from doing nothing. Plus, it clears your name legally and gives you a chance to move on without looking back.
Here’s the best part: you don’t have to do any of this alone.
With our team of specialized attorneys at Imani Law, we are here to handle all the legal details for you. We’ll guide you through the steps of officially terminating or dissolving your LLC, so you can stop paying the California government for absolutely nothing.
We make it painless, easy, and quick!
Don’t Let Your LLC Haunt You. Act Today!
Look, nobody likes paying for things that aren’t useful.
And your LLC’s been sitting there like an unused gym membership, taking your money while offering zero benefits.
If you’re not going to use it, don’t let it haunt you for another year.
Dissolve it or terminate it and take your unused LLC off your mental load.
At Imani Law, we’ll take care of the legwork so you don’t have to deal with penalties, tax bills, or legal headaches.
Ready to finally say goodbye to that abandoned LLC? Let’s chat—we’re happy to help!
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