The dissolution of an LLC in Texas is a detailed process that requires following several steps and understanding the associated costs and requirements under Texas law.
Steps for Dissolving an LLC
To properly dissolve an LLC in Texas, you must go through several legal steps, which include:
- Voting to dissolve the LLC with the business members.
- Acquiring a Certificate of Account Status from the state.
- Filing a Certificate of Termination with the Secretary of State.
- Closing accounts and paying taxes that are owed.
- Notifying relevant third parties like government agencies and other creditors.
- Distributing company assets according to the operating agreement, if one exists.
Reasons for dissolving an LLC can include ending the business or wanting to start a new business entity.
Timeframe and Costs
The entire dissolution process generally takes about 2-3 months. Specific timeframes for individual steps are as follows:
- The Certificate of Termination process: 3-5 days through the Secretary of State.
- The Account Status Certificate: 4-6 weeks from the Comptroller.
Texas charges a $40 filing fee to dissolve an LLC. The overall costs may vary based on the complexity of the company.
Final Steps and Considerations
To dissolve your LLC, submit the completed Certificate of Termination of a Domestic Entity (Form 651) in duplicate, accompanied by the Certificate of Account Status, to the Secretary of State by mail, fax, in person, or at SOSDirect Online.
Upon dissolution, the business name becomes available for others, and the entity loses its legal standing. Dissolving an LLC is a pivotal step in officially closing the company’s affairs within the state. It’s essential to classify your LLC as foreign or domestic, as this will determine the filings required.
Please note that dissolving an LLC incorrectly may result in liabilities; hence it is advisable to consult a Texas business attorney for professional assistance.