How to Undo an LLC

By Salvatore Jackson

A limited liability company, or LLC, is a popular business structure among small business owners. An LLC is created once an individual submits a document, often called an articles of organization, with a state business licensing agency. The only way to undo the creation of an LLC once the LLC’s articles of organization have been accepted is to file another document, usually called an articles of dissolution, with the state business licensing agency.

Step 1

Conduct a vote among LLC members to dissolve the LLC. If your LLC has an operating agreement, follow any voting provisions set forth in that document pertaining to dissolution. If your LLC does not have an operating agreement, state LLC statutes typically require a unanimous vote of LLC members.

Step 2

Obtain and file a notice of winding up. If your LLC has contracts with other companies, you'll need to give those companies notice that your LLC will be ceasing operations. The state agency that registers business organizations typically provides these forms for you to fill out and send to the appropriate companies.

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Step 3

Wind up the affairs of the LLC. If the LLC has entered into any contracts, these contracts must be “wound up” before the LLC can be dissolved. Any assets owned by the LLC must be sold. Proceeds from the sale of LLC assets must be used to pay creditors of the LLC. If any proceeds are left after creditors are paid, LLC members receive the remainder.

Step 4

Obtain an articles of dissolution form from the state business licensing agency. These forms are sometimes provided online by state agencies.

Step 5

Fill out the articles of dissolution form. While state requirements vary, you will typically need to provide the name of your LLC and the date of dissolution. All members of your LLC must sign the articles of dissolution form.

Step 6

File the articles of dissolution form. It may cost up to about $25 to dissolve an LLC, though some states do not charge a fee at all. The articles of dissolution form must be filed with the state business entity registration agency.

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References

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