There are 3 steps to closing a Delaware LLC: Dissolution, Winding Up, and filing a Certificate of Cancellation.
Member Approval
Members must vote to dissolve an LLC. Check your LLC agreement for details. Two-thirds of members must vote in favor of dissolution. Record the vote in meeting minutes.
Winding Up Affairs
Next, wind up LLC affairs:
- Pay creditors
- Settle lawsuits
- Pay taxes
- Distribute remaining assets
Certificate of Cancellation
File a Certificate of Cancellation and Cover Letter with the state ($200 fee). You can file by mail or online.
LLCs incorporate in Delaware for favorable state laws, not necessarily for their location, as most LLCs don’t operate within the state. Failure to pay franchise tax leads to penalties and interest, and the state may eventually void the LLC status.
To liquidate an LLC, you can either:
- Sell assets and distribute proceeds to members
- Dissolve the LLC and distribute assets directly
- Convert the LLC to another type of business entity
Before liquidation, you must fulfill all financial obligations if the company has debts. If this is not possible, bankruptcy may be a more suitable option.
How much does it cost to dissolve a Delaware LLC?
To dissolve a Delaware LLC, you must file a Certificate of Cancellation with the state, which has a $200 fee.
What is required to dissolve a Delaware corporation?
The requirements are similar to those for dissolving an LLC. Members must vote, handle all company affairs, and file the appropriate paperwork with the state.