Wanting to try a small business, I created an S-Corp, but at that time, I didn't know much about taxes. It seemed cool that I could just submit a few documents to an online agency and have a company registered in my name, and I was very excited.

However, the reality was that I couldn't even sell products online for six months before having to close down. It turned out that I had insufficient market research and managing everything alone was much more overwhelming than I had thought. I lightly thought that just closing it would be the end, and quietly wrapping things up was a mistake.

One day, while I was working at another job and had completely forgotten about my business, a tax-related letter arrived at my home.

At first, I ignored it thinking it was an advertisement, but as similar letters kept coming, I felt something was off and opened one.

When I opened the envelope and read the contents, I was shocked to see a staggering number. $2,000... I was supposed to pay $800 a year, but this was the amount including penalties for not paying for two years. The S-Corp that I thought was already closed was still considered active in the state of California.

I had never made a profit, so why was I being asked to pay taxes for several years? Upon further investigation, I found out that in California, once you register as a corporation, regardless of actual operations, you are required to pay an annual Franchise Tax, which is a minimum of $800 every year.

Even if you are not operating a business or have no revenue, the rule is to pay as long as you exist. I had left it unpaid for three years, and the consequences were much heavier than I had anticipated. The unpaid amount had accrued interest and turned into a penalty bomb.

What was even more disappointing was the fact that simply closing the doors does not mean it's over. Corporations do not automatically disappear. You must go through an official termination process, and if you don't, the company remains legally active on paper.

Eventually, I learned about the 'business closure notification' too late and had to call the FTB multiple times for consultations to sort out the unpaid fees and go through the recovery process to properly submit the closure documents. That process was not easy and added a much greater stress burden.

At first, I felt wronged, but over time, I came to realize that this was a result of hastily starting a business without knowing much and not properly wrapping things up.

I belatedly understood that the $800 was not just a tax, but a responsibility to maintain the name of the corporation. If someone is currently contemplating, 'Should I try a small business?' I want to say this: starting is important, but you need to do your research first.