AB 2503: Corporations: limited liability companies: dissolution: cancellation: abatement of taxes.

(1)The General Corporation Law sets forth procedures for the creation and dissolution of a corporation. The California Revised Uniform Limited Liability Company Act governs the formation, operation, and dissolution of limited liability companies.

This bill would make a domestic corporation and a limited liability company subject to administrative dissolution or administrative cancellation, as specified, if the corporations or companys corporate powers are, and have been, suspended by the Franchise Tax Board for a specified period of time. Prior to the administrative dissolution or administrative cancellation of the corporation or company, the bill would require the Franchise Tax Board to provide notice to the corporation or company of the pending administrative dissolution or administrative cancellation. The bill would require the Franchise Tax Board to transmit to the Secretary of State the names and Secretary of State file numbers of the corporations and companies subject to administrative dissolution or administrative cancellation. The bill would also require the Secretary of State to provide notice of the pending administrative dissolution or administrative cancellation on its Internet Web site, as specified. The bill would authorize a corporation or limited liability company to provide the Franchise Tax Board with a written objection to the administrative dissolution or administrative cancellation. If there is no written objection or the written objection fails, the bill would require the corporation or company to be administratively dissolved or administratively canceled and would provide that the certificate of the Secretary of State is prima facie evidence of the administrative dissolution or administrative cancellation. Upon administrative dissolution or administrative cancellation, the bill would abate the corporations or companys liabilities for qualified taxes, interest, and penalties, as provided.

This bill would authorize the Franchise Tax Board to abate, upon written request by a qualified entity, as defined, unpaid qualified taxes, interest, and penalties, as defined, for the taxable years in which the entity certifies, under penalty of perjury, that it was not doing business, as defined. The bill would make this abatement conditioned on the dissolution or cancellation of the qualified entity prior to the abatement. The bill would require the Franchise Tax Board to prescribe rules and regulations to carry out these abatement provisions and would exempt these rules and regulations from the Administrative Procedure Act.

(2)Existing state constitutional law prohibits the Legislature from making any gift, or authorizing the making of any gift, of any public money or thing of value to any individual, municipal, or other corporation.

This bill would make certain legislative findings and declarations that its provisions serve a public purpose, as provided.

(3)By expanding the crime of perjury, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.