Can I Dissolve an LLC Without a Lawyer?

By Joe Stone

Dissolving an LLC can be accomplished without a lawyer. Every state allows LLC owners to file the required documents to dissolve an LLC, and provides a pre-printed form with instructions to facilitate the process. However, dissolving an LLC simply brings an end to the LLC's legal existence and does not necessarily mean that the LLC's dissolution meets your needs, the needs of any other owners or the business itself. A lawyer's services can help address these issues.

Dissolving an LLC can be accomplished without a lawyer. Every state allows LLC owners to file the required documents to dissolve an LLC, and provides a pre-printed form with instructions to facilitate the process. However, dissolving an LLC simply brings an end to the LLC's legal existence and does not necessarily mean that the LLC's dissolution meets your needs, the needs of any other owners or the business itself. A lawyer's services can help address these issues.

Dissolution

Each state’s LLC laws require the filing of a document, referred to variously as articles of dissolution or certificate of dissolution, to dissolve an LLC. Filing the required document is relatively easy and does not require a lawyer’s services. You can obtain a dissolution form from the state agency that authorizes LLC formations, such as the secretary of state, which will include instructions on completing and filing the form. Filing this document prevents the LLC from continuing to incur such expenses as state-imposed annual fees and taxes; however, this does not mean that your LLC no longer exists, and further action that may require a lawyer’s services may be needed to properly wind-up the LLC's affairs.

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Winding-up

The precise steps that need to be taken to wind-up the LLC’s affairs will vary greatly from one situation to another, depending on the legal requirements of the state where the LLC was formed and the type of business activity that was engaged in by the LLC. For example, some states require obtaining a tax clearance certificate from the state’s taxing agency to verify that the LLC has filed all state returns and paid taxes. If the LLC was a party to a lawsuit or even threatened with legal action, the LLC will still be subject to the legal proceedings regardless of the fact that a certificate of dissolution was filed. The LLC will have to pay its remaining creditors and distribute remaining assets among its members. If the LLC was engaged in any significant amount of business, a lawyer’s services will almost certainly be necessary to ensure that the remaining matters involving the LLC are adequately resolved.

Member Disagreement

A lawyer's service are advisable in situations where there is disagreement among the members regarding the operation and dissolution of the LLC. The right of any one member to dissolve the LLC may be limited by state law or an operating agreement made between the members. For example, a member of a New York LLC may find that he cannot dissolve the LLC -- even when the members disagree about how to run the business -- unless there is an operating agreement specifying a right to dissolve. In the absence of a specific provision in the operating agreement giving the member a right to dissolve the LLC due to disagreements, New York LLC law applies by default -- and since there is no such right in the law, the member cannot dissolve the LLC.

Abandoning LLC Operations

Although dissolving and winding-up an LLC's affairs may prove more difficult than expected, you should not simply abandon an LLC when its business purpose may have become frustrated or simply ends. Without taking the proper steps related to dissolving the LLC, state fees and taxes, as well as penalties, will continue to be incurred. When these obligations go unpaid, the LLC will be administratively suspended by the state, and will be legally prohibited from acting in important situations such as defending against a lawsuit. Also, such circumstances may result in the members becoming personally liable for the LLC’s remaining debts. The Miller Nash law firm advises to obtain the services of a lawyer in order to properly dissolve an LLC in all cases, but particularly where there are difficulties.

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Business Life Cycles of an LLC

References

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What Happens if an LLC Is Sued After It's Dissolved?

Rules regarding running and dissolving a limited liability company vary according to the state law under which the LLC was formed. An LLC is an independent legal entity that exists separate from its owners, which are called "members." It provides its members the same protection from personal liability that a corporation gives. Note that an LLC must be formed by filing articles of organization with a state business registrar, and it must be dissolved by filing articles of dissolution. Whether or not you can sue a dissolved LLC depends on whether it was properly dissolved, and if so, how long ago.

Purpose of Filing an LLC With a State

The limited liability company business structure -- commonly referred to as a hybrid of the corporation and partnership -- is only an option if you adhere to all filing procedures in the state in which you want to create the entity; this doesn't necessarily need to be the state in which you operate. This is because legal formation of the LLC cannot occur without filing the proper documentation with the secretary of state, or similar agency, in your jurisdiction. But this is only the initial purpose; there are other reasons why you may want to file documentation to form an LLC in one or more states.

How to Close an LLC

A limited liability company is legally considered a registered citizen of the state where it filed articles of organization. In order to cease operations, the members of the company must surrender the company's authority to do business by filing articles of dissolution with the secretary of state. Filing dissolution papers is only one aspect of closing down an LLC, however. Members should refer to the state's statute dealing with limited liability companies and follow the exact provisions of the law to wind up affairs and to avoid personal liability for debts and lawsuits that may arise after dissolution.

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