How to Dissolve an LLC

Closing your LLC? Learn how to dissolve an LLC the right way: member vote, Articles of Dissolution, tax clearance, EIN cancellation, and avoiding surprise liabilities.

You can't just stop using an LLC — an abandoned LLC keeps accruing filing fees, taxes, and liability until the state dissolves it (often automatically, which hurts your record). Proper dissolution is deliberate and, with this checklist, takes about two weeks.

Step 1: Get Member Approval

Check your operating agreement for the dissolution vote threshold (usually majority or unanimous). If there's no agreement, your state's default LLC act controls. Document the vote in writing — the state won't ask for it, but creditors and partners might.

Step 2: File Articles of Dissolution

File Articles of Dissolution (or Certificate of Cancellation) with your Secretary of State, pay the filing fee ($20–$200), and get your certificate. Most states require the LLC to be current on annual reports and fees before accepting the dissolution — back filings can block or delay it.

If the business never really started, many states offer a cheaper short-form cancellation for LLCs with no debts or assets.

Step 3: Settle Debts, Taxes & Notify Creditors

Before filing for dissolution and before distributing remaining assets:

• Pay all outstanding creditors (contractors, vendors, landlords).
• File final federal and state tax returns marked "final."
• Cancel state sales-tax and employer registrations.
• Notify known creditors in writing; some states require a public notice period (e.g., publishing in a newspaper) to bar unknown claims.

Personal guarantee alert: dissolving the LLC does not erase debts you personally guaranteed — leases, loans, and vendor terms often include one.

Step 4: Cancel EIN & Close Accounts

Send a letter to the IRS to close the LLC's EIN account (the IRS has no online cancellation). Close business bank accounts, cancel insurance policies, and terminate payroll accounts — leaving any of these open creates ongoing exposure and fees.

Step 5: Distribute Remaining Assets

After all debts are paid, distribute what's left to members per the operating agreement's distribution rules. Keep records: the state can ask for proof that creditors were paid and members received their due share.

Alternative: Reinstatement, Not Dissolution

If the LLC was administratively dissolved for missing filings, you may not need to start over — most states allow reinstatement (pay back fees + file renewal). See the LLC reinstatement guide before dissolving a company you might revive.

Frequently Asked Questions

How much does it cost to dissolve an LLC?

Most states charge $20–$200 for the dissolution filing, plus any back annual-report fees owed. Ending a dormant LLC usually totals under $300.

Can I dissolve an LLC myself?

Yes. Filing Articles of Dissolution with your Secretary of State is a do-it-yourself process. You mainly need member approval and clean tax/creditor status.

What happens if I don't dissolve an LLC?

The state may administratively dissolve it after repeated missed filings, but you still owe annual fees and can accrue tax penalties. Your name stays on record as a defunct owner.

Do I owe taxes when dissolving an LLC?

File a final tax return for the year through the dissolution date. Remaining debts are settled first; final distributions to members are generally taxable to them.