Reasons for Dissolution of an LLC
Dissolution of an LLC occurs when its business purpose ends or is no longer profitable. Members may also agree to dissolve if they disagree on decisions.
To dissolve an LLC, members vote to stop the company. If debts are settled, this allows amicable closure. If unable to pay debts, judicial liquidation is required.
Steps for Dissolution of an LLC
Within a month of deciding to dissolve, the liquidator files minutes of the dissolution meeting, appointment documents, and a dissolution statement. Most states require filing paperwork to officially dissolve.
File articles of dissolution, pay a small fee, file a final tax return, and notify relevant authorities. The state may administratively dissolve an LLC for not paying taxes and fees, not filing reports, or lacking a registered agent. Members can also sue for judicial dissolution and asset distribution.
Follow state laws and operating agreement for voluntary dissolution procedures. Record the decision, file a final tax return, and notify state authorities to formally wind up an LLC. Overall, dissolving an LLC requires voting, settling debts, notifying parties, filing paperwork, and closing tax accounts.