California Business Portal

If I form a legal business entity but have not started doing business, do I still have to pay taxes (for example, corporation, limited liability company, limited partnership, etc.)?

If I form a legal business entity but have not started doing business, do I still have to pay taxes (for example, corporation, limited liability company, limited partnership, etc.)?

All business entities whether a corporation, limited liability company (LLC), or limited partnership are subject to franchise/annual tax if they:
  • Incorporate or organize in California.
  • Qualify or register to do business in California.
  • Start to do business in California, whether or not incorporated,   organized, qualified or registered under California Law.                                                                                        
Until the business entity formally terminates their legal existence, the entity continues to exist. Likewise, their entity's filing and annual tax requirements continue to exist.

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