Under a new state program, the state tax board has begun sending out the first of many monthly mailings to approximately 23,332 limited liability companies whose records are eligible for suspension. California officials are suspending LLCs due to the lack of filed state tax returns and other necessary information filings and overdue annual tax fees.
According to the Franchise Tax Board and the California state tax agency, if a company is suspended, that company will lose the rights to its name, it will be unable to sue or be represented in court, its contracts will be unenforceable and it will not be able to do business in California.
Next year, the secretary of state is expected to begin proceedings of its own to suspend LLCs for lack of filing an information statement every two years. Those LLCs who have not filed these forms, could be subject to a $250 penalty.
Before a suspension is imposed, the tax board is allowing any targeted LLCs 60 days to resolve any issues or explain why a notice was sent in error. To avoid suspension, LLCs must file missing income tax returns and pay any outstanding fees, taxes, penalties and accrued interest charges. If an LLC is cancelled, it is still responsible for missing income returns and unpaid fees, taxes and interest.
The tax board anticipates its new suspension program will reduce tax gaps and bring about LLC compliance. An estimated $64.7 million is owed by these non-compliant LLCs in back taxes, fees, penalties and interest. In addition, California officials will continue to bridge these gaps by increasing 2009 fees and penalties and forcing LLCs to file income tax returns sooner. At least one decision by the Board of Equalization has indicated that a shareholder can be liable for corporate taxes if certain conditions are met, and similar liability could apply to an LLC member who walks away. So it is best to close down an LLC that is no longer being used to ensure that you do not become liable for taxes, fees and penalties.
For more information on LLCs and the tax board's suspension program, please visit the tax board website at www.ftb.ca.gov.
Risky Business Seminar in New York April 25, 2009
Volunteer Lawyers for the Arts is sponsoring a one day seminar with Mark Litwak on Saturday, April 25, 2009 in Manhattan.
This comprehensive seminar explores how independent films are financed and distributed. Topics include financing via pre sales, debt and limited partnerships, negotiating tactics, typical contract terms, cross collaterization and creative accounting. Particular attention is paid to how producers and filmmakers can protect themselves by watering down warranties, getting added to the E & O policy, adding performance, termination and arbitration provisions, using lab access letter to retain possession of the negative, and a schedule a minimums.
Other topics include criteria for selecting a distributor; what is negotiable and what is not; compliance with state and federal laws when seeking investors; retaining an attorney or producer's rep; confirming arbitration awards in Superior Court; and enforcing judgments. The seminar includes a handout with a distribution contract, articles, a self defense checklist and other materials.
Since 1969, Volunteer Lawyers for the Arts has been the leading provider of pro bono legal services, mediation services, educational programs and publications, and advocacy to the arts community in New York. The first arts-related legal aid organization, VLA is the model for similar organizations around the world. For more information about Volunteer Lawyers for the Arts, please go to: www.vlany.org.
NETFLIX WILL AWARD $350,000 TO FILMMAKER
NETFLIX, in association with Film Independent, has announced its Find Your Voice film competition contest. The contest is open only to the first two thousand individuals who are legal residents of the fifty (50) United States (including D.C.), at least eighteen (18) years old at the time of entry and who have never created and publicly screened a full length narrative feature film of seventy (70) minutes or more. The prize of cash and services is worth approximately $350,000.
To apply, one must submit an application and a feature length script (80-120 pages). Applicants can also submit optional materials: a list of cast and crew, a budget top-sheet and a DVD with sample footage or a link that provides online access to such footage. The award is for a narrative film, not a documentary.
Additional information at netflix The deadline to submit an application is February 9, 2009.