How to Dissolve an LLC in New Jersey

By Laura Payet

How to Dissolve an LLC in New Jersey

By Laura Payet

Dissolving a limited liability company (LLC) in New Jersey is not difficult, but the consequences of not doing it properly can be severe. Until the company is officially dissolved, it remains obligated to file and pay LLC taxes and other required annual documentation.

If you are the LLC's sole member, you can handle the dissolution process yourself. If you have a multimember LLC, however, you may want to consider designating one or two members to handle the dissolution.

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Dissolution generally includes the following steps:

1. Ensure the LLC is in good standing.

Being in good standing means that your LLC is up to date on all paperwork, including tax returns, annual reports, and tax payments required by the state. You can review your LLC's tax status and outstanding obligations on the state's online tax system.

2. Members Must Agree to Dissolve.

A unanimous vote of all LLC members is required under New Jersey law to dissolve your company unless your LLC's operating agreement provides for a less than unanimous vote, such as a simple majority.

3. Wrap up LLC affairs.

Before you can request dissolution, you must conclude all of the LLC's business. These steps include:

  • Making sure all debts are paid to creditors
  • Settling any outstanding lawsuits
  • Distributing remaining LLC assets

Note that the above steps must be followed in order. Before distributing any company assets to members, you must pay all creditors to avoid potential lawsuits.

4. File a Certificate of Cancellation and Tax Clearance Request.

The Certificate of Cancellation (L-109) is available on the Division of Revenue and Enterprise Services (DORES) website. You must supply the following information and sign on behalf of the LLC, verifying that the information you provide is true and correct:

  • Business name
  • Business entity number, which is the LLC's Employer Identification Number (EIN)
  • LLC formation date
  • Date of dissolution, which cannot be either before the filing date or more than 30 days afterward
  • Reason for dissolution

Along with the certificate, submit a filing fee—currently $100 for domestic LLCs and $125 for foreign LLCs. Once the state receives and processes the certificate, you can submit a tax clearance request if your LLC generates revenue.

The dissolution becomes effective when DORES receives and approves both forms. At this point, the LLC is no longer responsible for taxes except any it still owes.

Pay careful attention to the latest requirements as you file your dissolution. Otherwise, your business could end up being responsible for penalties and fees in addition to taxes—and may remain liable to creditors. If you are unsure if you have followed all requirements, your best bet is to seek professional advice.

 

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.