How to Dissolve an LLC: A Step-by-Step Guide

Closing an LLC takes more than shutting down operations. Until you file dissolution paperwork with the state, your company stays on the books as active, which means annual reports, franchise taxes and registered agent fees keep coming. Here's the full process, in the order most owners follow it.

1. Vote to dissolve

Start with your operating agreement. Most agreements spell out how the company can be dissolved: a unanimous vote of members, a majority vote, or a specific event. If your agreement is silent, your state's LLC statute sets the default rule.

Record the decision in a written resolution or consent signed by the members (or managers, in a manager-managed LLC). You usually don't file this with the state, but you should keep it with the company's records.

2. Wind up the business

Winding up means finishing the company's affairs before it formally ends. That typically includes:

Completing or cancelling open contracts and orders
Notifying creditors, customers and vendors that the company is closing
Collecting money owed to the company and paying its debts
Selling or distributing remaining assets to members according to the operating agreement
Cancelling business licenses, permits and sales tax registrations

Some states have a formal notice procedure for known and unknown creditors that limits how long claims can be brought after dissolution. Ask an attorney whether it makes sense for your company.

3. Get current with the state

Many states won't accept a dissolution if the company is behind on annual reports or state fees. Some also require a tax clearance certificate showing all state taxes have been paid. Check your company's status with the Secretary of State and resolve anything outstanding before you file.

4. File Articles of Dissolution

This is the filing that ends the LLC's legal existence. Depending on the state it's called Articles of Dissolution, a Certificate of Cancellation, a Certificate of Termination or a Statement of Dissolution. The form usually asks for:

The LLC's exact legal name and state file number
The date the dissolution was approved
An effective date, if you want something other than the filing date
A signature from an authorized member, manager or other authorized person

State filing fees range from nothing to a few hundred dollars. You can look up your state's fee before you order.

If the company is registered to do business in other states as a foreign LLC, you'll also need to withdraw from each of those states. We cover that in Dissolution vs. Withdrawal.

5. Close out federal taxes and accounts

After the state filing, finish the federal side:

Final tax return. Multi-member LLCs file a final Form 1065 and check the "final return" box. Single-member LLCs report the final year on the owner's return. LLCs taxed as corporations file a final corporate return.
Payroll. If you had employees, file final employment tax returns and issue final W-2s.
EIN. The IRS doesn't cancel an EIN, but you can ask it to close the business account by letter once all returns are filed.
Bank accounts. Close business bank accounts and credit lines after final payments clear.

How long does it take?

The preparation can be done in a day. State processing ranges from same-day approval in some states to several weeks in others. With Terminate LLC, your filing is submitted within 1 business day of your order, and we email the approved document as soon as the state returns it.

Short version: approve the dissolution, wind up the business, get current with the state, file Articles of Dissolution, then close your federal tax accounts.

This article is for general informational purposes only and is not legal or tax advice. Requirements vary by state; consult an attorney or tax professional about your situation.