Can You Backdate Dissolution of an LLC?

Shutting down your limited liability company can be just as complicated as settling the affairs of someone who has recently passed away. An LLC is an independent legal entity under state law, and properly putting it to rest involves liquidating the company's assets, paying off debts and filing dissolution or cancellation paperwork with the state that authorized its formation. Attempting to backdate the official paperwork would have legal consequences that can adversely affect the company's creditors.

Dissolving LLC

When you close down a business that has independent standing under the law, you must wind up its affairs and dissolve the company by filing cancellation paperwork with a state business registrar. Filing this paperwork establishes an official end date for the business and puts the dissolution on the public record. If you simply shut the doors and liquidate the LLC's assets without filing dissolution paperwork, the company continues to exist, even though it's not operational. The LLC remains responsible for state and federal reporting and tax obligations, and third parties can sue the company and its owners as if the business were still up and running.

State Law Requirements

LLCs are formed and dissolved under state law. Each state has a business code that details how to properly file a certificate of dissolution, also called a certificate of cancellation. Generally, an authorized representative of the company must use a form to acknowledge that the owners want to dissolve the LLC as of a specific date, and file it with the same state agency that accepted the company's articles of organization. By default under state law, any paperwork filed with the state's business registrar is effective as of the date the filing is accepted by the agency.

Effective Date of Dissolution

There is no way to backdate a dissolution filing. While your business may have stopped operating at some point in the past, the change in its legal status can only happen once you file the certificate of dissolution and the state accepts it. Most states allow LLCs to specify an effective dissolution date up to 180 days in the future, but trying to establish a dissolution date prior to the official filing would disadvantage potential creditors in favor of the company's owners.

Ending Liability

If you wind up your business affairs according to the procedures set by state law, you can prevent third parties with claims against the company that arise after you go out of business from suing you or the defunct LLC. The company's dissolution date starts the timer on this type of liability, so owners can rest assured that they won't have to face lawsuits regarding the closed-down company after a specific date. The law doesn't let business owners set the dissolution date prior to the official filing because the filing informs the public of the company's new status and is a neutral point to establish rights between the business owners and potential creditors.

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