You must dissolve your limited liability company with your state if you are no longer doing business. The process will transfer your company's assets and settle your debts. Some states tax LLCs and have annual reporting requirements, and if you do not officially dissolve the company, fees and penalties may be assessed by the state even after your business has closed. The exact forms needed for LLC dissolution vary by state and the size of your LLC.
Articles or Certificate of Dissolution
Articles of dissolution is a form that sets out your LLC's financial state and how the members decided to dissolve, such as by vote. Some states require submission of a formal resolution by the members to dissolve the LLC, like the written record of the meeting and a dissolution vote tally. The articles of dissolution must include the debts and liabilities the LLC has and the details for the final distribution of assets, but exact requirements vary by state. A foreign LLC -- a company headquartered in another state -- may have to file a certificate of dissolution to cancel any foreign business registrations.
An LLC must file Form 966, Corporate Dissolution or Liquidation, with the Internal Revenue Service for the tax year the business dissolution occurred. The form is used by the IRS to determine the tax consequences of the gain or loss from the final distribution of the LLC's assets to members.
Notice and Proof of Payment to Creditors
You must notify all creditors of the LLC before terminating the company. The methods of notification differ by state, and a specific form or certified mailing may have to be sent to each creditor. You may be required to file proof of payment of the LLC's debts and your mailing notices with the state business department before you are allowed to dissolve the LLC.
Consent to Dissolution
You may need a consent to dissolution form from your state's tax department. The form certifies that all of your business taxes due to the state have been paid in full. You may not be able to dissolve the LLC until all outstanding business taxes are paid.
Read More: Reasons for Voluntary Dissolution of LLC
You may need to petition in court for a judicial order dissolving the LLC if you cannot get the number of member votes required by law and your operating agreement. You must prove why the dissolution is necessary, like providing financial statements showing the LLC no longer has enough money to function as a business.
- California Secretary of State: Limited Liability Company Cancellation Filing Requirements
- Keyt Law: What You Need to Know Before Dissolving an Arizona Limited Liability Company
- Internal Revenue Service: Form 966
- State of California Franchise Tax Board: Guide to Dissolve, Surrender or Cancel a California Business Entity
- Financial Web: LLC Tax Return - The Forms You Need To File