Not every small business works out as well as originally intended. If you have a limited liability company that is not doing as well as you intended, you can dissolve the business and transfer any remaining assets of the company to the members. LLCs must follow state laws when dissolving, so read the Limited Liability Corporation Act of the state for which the LLC is incorporated in for specific details. Generally, states follow similar procedures.
Vote for dissolution at a meeting of the LLC's members. Different states have different rules concerning the percentage of members that must agree to the dissolution. States range from 50 percent to 100 percent.
Read More: How Do I Dissolve an LLC?
Pay all outstanding tax obligations incurred by the LLC. Depending upon the nature of the business, tax obligations can vary and include items such as sales tax, employee withholding and property tax.
Pay off all known debts of the LLC. If you anticipate that the LLC will incur future debts as the result of a judgment in a lawsuit or other claims, set aside money to meet those obligations when they come due.
Distribute the remaining assets to the LLC's members according to the percentage of ownership. For example, a 5 percent member should receive 5 percent of the remaining assets.
File articles of dissolution with the appropriate state's Secretary of State. In most states, this is a one-page form and requires a small filing fee.
File final tax returns with the state and federal government. The returns should be marked "Final Return."
Publish notice of dissolution according to the procedures outlined by state law. Generally, you must publish in a local paper and include a final date by which creditors can come forward and make claims against the LLC. The date is determined by state law.
Close all of the LLC's bank accounts.
If an LLC is not properly dissolved, members can be held personably liable to creditors and tax authorities. You should consult with an accountant and an attorney to assist in dissolving your small business.
A professional writer, Michael Butler has been writing Web content since 2010. Butler brings expertise in legal and computer issues to his how-to articles. He has a Bachelor of Arts in English literature from Washburn University. Butler also has a Juris Doctor from Indiana University School of Law, Bloomington.