Using your limited liability company's bank account after dissolution is essential to wind up the affairs of the LLC, but you cannot use it to enter into new business. An LLC is an independent business entity formed under state law, which also controls how an LLC comes into existence and how it goes out of business. By following the correct steps for dissolution, you will ensure that you have satisfied all the debts and obligations of the company.
Because LLCs are controlled under state law, your state's statute on LLCs will provide how the company can be dissolved. Dissolution involves multiple steps, including making the initial decision among the LLC members to close down the business and filing dissolution documents with the states. Additionally, the company will sell its assets, pay off creditors and pay final taxes as part of the dissolution process.
Articles of Dissolution
In most states, an LLC must file articles of dissolution, also known as articles of termination, with the state. Filing the articles will establish the company's official end date, but the company can give itself further time to wind up its affairs after the articles are filed. Companies may file the articles after the affairs are wound up, or they may file the articles first and provide a future date on the articles for the final termination of the LLC.
Read More: Reasons for Voluntary Dissolution of LLC
Winding Up Affairs
After an LLC has been dissolved, the members have a reasonable period of time to wind up the company's affairs. This includes addressing all of the company's liabilities, paying debts and taxes and defending or proceeding with lawsuits on the company's behalf. The members of the LLC need to keep the bank account. Additionally, the LLC is required to put money aside to pay any pending creditor claims that may not be resolved in its favor after the articles of dissolution are filed. If an LLC does not do so, a creditor may pursue assets that were already distributed to the members of the company during the dissolution process.
Although the LLC is allowed to use its bank account while winding up its affairs, it may not enter into new business transactions. After dissolution, the members do not have the authority to transact new business on behalf of the LLC, or otherwise use the bank account to act as if the LLC is still in operation. As such, the use of the company's bank account after dissolution is limited to winding up the affairs of the LLC.
Elizabeth Rayne earned her J.D. from Penn State University and has been practicing law since 2009, advising clients on issues ranging from employment law to nonprofit management. For two years, she served as a contributing editor for the "Vermont Environmental Monitor."