A business corporation is considered as an independent entity. It is created under state law. If the company intends to perform business in other states, it has to register as a foreign entity. Now, if the corporation decided to stop doing business in other states, it must withdraw its business in those states.
Withdrawal of Corporation
If your organization decided to stop doing business as a foreign entity in a given state, it must apply for a withdrawal of corporation. It means that you have to withdraw your registration as a corporation in that state but continue to operate in California. If this is the case, you must file a form with the Secretary of State to notify the state that your corporation is withdrawing its registration. This form is also known as Certificate for Withdrawal.
This certificate will not be issued, however, if your corporation has not filed a final tax return in the state outside of California. You also need to present all outstanding fees that have been paid already.
What if the Corporation Failed to Withdraw?
It is important to remember that, as a corporation, you and your shareholders are responsible for all taxes. You must also submit all required reports in states where the corporation has been registered to do business. If you failed to withdraw your registration, you are still liable for tax obligations and filing in those states.
Failure to remove your registration will cause your business to no longer be good standing. Bear in mind that corporations that are not in good standing in certain states cannot pursue lawsuits in court. They are also liable for civil penalties, as well as fees to that state. Furthermore, they cannot continue to perform business in the state.
What can We do?
Here at Enterprise Consultants Group, our tax attorneys are here to assist in filing Certificate for Withdrawals. We can prepare the documents and submit them to the proper government agencies. Because of our years of experience, we can help prevent or minimize any loss of assets if you choose to withdraw your registration from a particular state. We can protect your interests and reduce your losses if you want to end your business in that state.
The quality and continuity of representation you can have with us reflects our commitment to offering you individual attention. Whether you are withdrawing your registration from a particular state or dissolving your corporation in California, contact us today at (800) 575-9284 for a free consultation.