When a business entity closes and no longer does business in California they must terminate their legal existence by dissolving, surrendering, or canceling their business. When closing your current business it is important to keep in mind that this will require you to close out your affiliated state and local accounts / registration filings.

Use the California Business Navigator to find the requirements for closing a business with the State of California.

Dissolution, Surrender, Cancellation Forms (Secretary of State and Franchise Tax Board)

Secretary of State’s Office - A domestic (California) or foreign (out–of–state or out–of–country) business entity can change the recorded information by filing the applicable form with the California Secretary of State. File the appropriate dissolution, surrender, or cancellation form(s) with the CA Secretary of State (SOS) within 12 month so filing your business’ final tax return. For more information, click here.

Franchise Tax Board - The California Franchise Tax Board administers personal and corporate income and franchise taxes for the State of California. All businesses are required to submit an annual Business Income Tax Statement to the Franchise Tax Board.  File the final current year tax return. Check the applicable Final Return box on the first page of the return, and write "final" across the top. For more information, click here.

Also see FTB Guide to Dissolve, Surrender or Cancel a California Business Entity.

Sellers Permit - Discontinue a Business with the Board of Equalization

When you sell or lease merchandise, vehicles, or other tangible personal property in California, even temporarily, you are generally required to register with the Board of Equalization (BOE) and to pay sales tax on your taxable sales. When you register, the BOE will issue you a seller’s permit. Whenever you buy, sell, or discontinue a business, you need to contact the Board of Equalization. If you are buying a business, you may need to obtain a seller's permit, as permits are not transferable. If you are selling or discontinuing a business, you will need to close out your account. For more information, click here.

Deactivating Employer Accounts

Businesses with employees must register with the California Employment Development Department (EDD) for state income tax withholding and employment taxes. Employers must also maintain worker’s compensation insurance and comply with laws establishing minimum standards for wages, hours and working conditions.

If you close your business, you are required to file a final DE 88 with payment, DE 9, and DE 9C within 10 days of quitting business, regardless of the normal due dates. For the EDD to close your employer account, you must complete Box “B” and “B1” on the DE 9.

Employers may inactivate their account using e-Services for Business.   If you had any employers or will be hiring new employees, check in with the CA Department of Employment Development (EDD).

For information for employers closing their businesses, click here.

Local Requirements - Notification/ Updating Records

Check in with your local city and county that you previously filed with (ie the County clerk’s office to change the “Doing Business As” name and the City Finance Department to change the “Business License / Tax Certificate” records)and inform them that you are closing your business.

Check with any other regulating entities that you filed with to determine the process involved in updating or obtaining new business licenses and permits.

You can also use our online permit assistance tool, CalGOLD, to help in identifying local, state and federal regulating agencies that you may have obtained permits from to update records and renew your permits with them. Once at the website input your city and type of business, if your business is not listed you can select "General Business Information".

Federal Employment Identification Number - Close of Business Requirements

You must file an annual return for the year you go out of business. If you have employees, you must file the final employment tax returns, in addition to making final federal tax deposits of these taxes. Consult the Internal Revenue Services (IRS) “Closing a Business” Checklist.

You can also use our online permit assistance tool, CalGold, to help in identifying local, state and federal regulating agencies that you may have obtained permits from to update records and renew your permits with them. Once at the website input your city and type of business, if your business is not listed you can select "General Business Information".

Resources

Assistance may be available to continue operating your business. Use the Business Navigator tool to find more information.

The U.S. Small Business Administration also has an online guide for closing businesses. Consult the guide by clicking here.

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The Governor’s Office of Business and Economic Development (GO-Biz) was created by Governor Edmund G. Brown Jr. to serve as California’s single point of contact for economic development and job creation efforts.  GO-Biz partnered with the State's Information Technology Leadership Academy 22 to create this website.

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