What is the penalty for late Statement of Information in California?

The penalty for filing a late Statement of Information is $250. This applies both to the initial SOI (due within 90 days of formation) and the biennial SOI (due every two years).

What happens if I don't pay California's $800 franchise tax?

If you fail to pay the franchise tax, the Franchise Tax Board (FTB) will assess penalties and interest. Eventually, the FTB will suspend your LLC, which prevents you from conducting business in California until you pay all amounts due and apply for revivor.

What does it mean for a California LLC to be 'suspended'?

A suspended LLC cannot lawfully conduct business in California. It cannot defend lawsuits, enter into contracts, or exercise the powers of an LLC. Suspension is typically caused by failure to pay franchise tax or file required tax returns.

How do I reinstate (revive) a suspended California LLC?

To revive a suspended LLC, you must file all delinquent tax returns, pay all unpaid taxes plus penalties and interest, and apply for a Certificate of Revivor from the FTB. You may also need to file delinquent Statements of Information with the Secretary of State.

What's the interest rate on unpaid California franchise tax?

The FTB sets the interest rate quarterly based on federal rates. Check the FTB website for the current rate. Interest compounds and continues until all amounts are paid in full.

Can I avoid the $800 franchise tax by dissolving my LLC?

To stop owing the $800 annual franchise tax, you must properly dissolve your LLC with the California Secretary of State. Simply stopping business operations or not filing returns doesn't eliminate the tax obligation - you'll continue to owe $800 per year until properly dissolved.

California LLC Late Filing Penalties 2026: What Happens & How to Fix

Item	Cost/Details	Notes
Statement of Information (late)	$250	Penalty for late filing
Franchise Tax Late Penalty	5-25%	Of tax due
LLC Fee Late Penalty	10%	Of fee due
Interest on Unpaid Tax	Variable	Set by FTB quarterly
Revivor Fee	Varies	All back taxes + penalties + interest

Statement of Information Penalties

California LLCs must file a Statement of Information (Form LLC-12) with the Secretary of State. Missing this filing incurs a significant penalty.

Filing Deadlines

Initial SOI: Due within 90 days of LLC formation or registration
Biennial SOI: Due every two years during the applicable filing period
Filing fee: $20

Late Filing Penalty

$250 Penalty for Late Statement of Information

Applies immediately after the deadline
No grace period
Penalty is in addition to the $20 filing fee
Total due when late: $270 ($20 + $250 penalty)

What Triggers the Penalty

Missing the 90-day deadline for initial SOI
Missing your biennial filing window
Filing after your designated period ends

Franchise Tax Board Penalties

The California Franchise Tax Board (FTB) administers the $800 annual franchise tax and assesses various penalties for non-compliance.

Late Payment Penalty

Situation	Penalty
Franchise tax paid late	5% of unpaid tax + additional 0.5% per month (max 25%)
LLC fee paid late	10% of fee due
Failure to file return	5% of tax due per month (max 25%)
Estimated fee underpayment	10% of underpayment

Interest Charges

Interest accrues on unpaid taxes from the due date
Rate is set quarterly by the FTB
Interest compounds over time
Interest continues until all amounts are paid

Collection Actions

The FTB has extensive collection powers:

Bank account levies
Wage garnishment
State tax liens
Offset of state tax refunds
License suspension for certain professions

LLC Suspension

California can suspend your LLC for various compliance failures. Suspension is a serious status that prevents your LLC from operating legally.

Causes of Suspension

FTB suspension: Failure to pay franchise tax or file required tax returns
SOS suspension: Failure to file required documents with Secretary of State

How Suspension Happens

Notice sent: The FTB sends notice that taxes are due
Demand notice: If no response, a final demand is issued
Suspension: If still unpaid, the LLC is suspended
Public record: Suspension status appears in state databases

Note: Suspension can happen faster than you might expect. If you're behind on franchise tax, address it immediately to avoid suspension.

Consequences of Suspension

A suspended California LLC faces serious operational restrictions:

What You CANNOT Do

Conduct business: Cannot legally transact business in California
File lawsuits: Cannot sue to enforce contracts or protect your interests
Defend lawsuits: Cannot file responsive pleadings in court (may get default judgment against you)
Enter contracts: Contracts may be voidable or unenforceable
Obtain permits/licenses: Cannot get new business licenses
File documents: Secretary of State will reject filings

What CAN Still Happen

You can still BE sued (and may not be able to defend)
Tax obligations continue to accrue
Personal liability risk increases for members/managers
Business relationships and credit may be damaged

Critical Warning: If your LLC is suspended, stop conducting business immediately. Operating a suspended LLC creates personal liability for members and managers, and any contracts entered into may be challenged.

How to Revive a Suspended LLC

To reinstate (revive) a suspended California LLC, you must resolve all issues with both the FTB and Secretary of State.

Step 1: Determine What You Owe

Contact the FTB to get your total balance due
This includes all back franchise taxes, LLC fees, penalties, and interest
Check with SOS for any delinquent Statement of Information filings

Step 2: File All Delinquent Returns

File all unfiled tax returns with the FTB
File all delinquent Statements of Information with SOS
Pay SOI late penalties ($250 each)

Step 3: Pay All Amounts Due

Pay all franchise taxes, LLC fees, penalties, and interest
Can set up payment plan if unable to pay in full (call FTB)

Step 4: Apply for Revivor

Request a Certificate of Revivor from the FTB
FTB will verify all taxes and returns are current
Once issued, your LLC is restored to good standing
SOS records will be updated automatically

Timeline

The revivor process typically takes:

FTB processing: 2-4 weeks after payment
SOS update: Usually automatic within a few business days of FTB revivor
Total: 3-6 weeks from paying all amounts due

How to Avoid Penalties

Statement of Information

Set calendar reminders for the 90-day initial deadline
Track your biennial filing period
File online through bizfile.sos.ca.gov for fastest processing

Franchise Tax

Pay the $800 by April 15 each year (for calendar year LLCs)
Make estimated payments if you expect to owe the LLC fee
Set up automatic payments or recurring reminders

If You Want to Close Your LLC

If you no longer want the LLC, don't just abandon it - you'll keep owing $800/year:

File a Certificate of Dissolution with the SOS
File a final tax return with the FTB
Pay any remaining taxes due
Once properly dissolved, no more franchise tax accrues

Bottom Line: California's penalties are significant, and the $800 annual franchise tax applies regardless of income. Stay on top of both SOS filings and FTB payments to avoid suspension and the costly revivor process.

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