How to Dissolve an LLC
At some point, you may decide to close your LLC. This guide explains the key steps, costs, and legal requirements to help you dissolve your business smoothly and stay compliant.
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Introduction to Dissolving an LLC
Hold a meeting with the Board of Directors
You can avoid future liabilities and ensure compliance with state laws by properly dissolving your LLC.
Settle Financial Obligations
If you’re ready to close your company, it is important to understand how to dissolve an LLC correctly .
Dissolve the Company and Then Cancel Permits
The dissolution process includes first reaching an internal company agreement to pursue dissolution
Processing Steps
Filing your Articles of Dissolution with the state, and settling all financial obligations and accounting.
Dissolving vs Terminating an LLC
What is the difference between these two actions?
Dissolution
Dissolution is the process of formally closing the LLC, which includes winding up its affairs, settling debts, and distributing remaining assets. This step ensures you meet all legal and financial obligations before ending the entity's existence.
Termination
Terminating the company is the final step after dissolution, where the LLC ceases to exist as a legal entity. Termination means the state removes the LLC from its registry and no longer recognizes it as a business.
Benefits of Dissolving Your Company
Understand why properly dissolving your company protects you legally and financially while giving peace of mind.
⚖️ Legal Protection
Formally dissolving avoids future liability, penalties, or legal disputes tied to the company.
💰 Stop Ongoing Fees
Eliminate state filing fees, annual reports, and tax obligations once the business is dissolved.
📑 Clear Records
Ensure government and financial records show the company is no longer active, avoiding confusion.
✅ Peace of Mind
Close your business cleanly and confidently, freeing you to focus on new ventures or personal goals.
FAQs for Dissolving Your Company
Dissolving a company means formally closing your business with the state so that it is no longer legally active and no longer responsible for taxes or filings.
Common reasons include stopping operations, avoiding ongoing tax and compliance fees, or restructuring your business into a new entity type. Proper dissolution prevents penalties and legal obligations.
The process usually requires filing Articles of Dissolution (or a similar document) with your Secretary of State and paying a small fee. Final tax returns must also be filed with the IRS and state tax agency.
Yes. In addition to state filings, you must file final tax returns with the IRS and cancel any business licenses, permits, or registrations to fully close your company.
Failure to dissolve properly can lead to continued tax liabilities, late fees, penalties, and damage to your business reputation. The state may also administratively dissolve your company, which can affect your legal standing.
In many states, yes. A dissolved company can be reinstated by filing reinstatement paperwork, paying overdue fees, and bringing filings up to date. However, the process and eligibility depend on state law.