Closing an LLC

Decide it the way your own document says

If there's an operating agreement, it will say what vote or written consent is needed to dissolve. Follow it, and put the decision in writing even if you're the only member — the written consent is what a bank or a state form will ask you to reference.

With no operating agreement, your state's default statute governs, which in a multi-member company often means unanimous consent. That's a good moment to discover you never wrote one.

Wind up before you file, not after

Winding up means finishing the company's business: collecting what's owed to it, paying what it owes, ending leases and contracts, cancelling subscriptions and licences, and closing accounts once nothing else will hit them.

Order matters here in a way that has personal consequences. Creditors come before members. Distributing the remaining cash to yourself and leaving a supplier unpaid is the fact pattern where members get pursued personally for a distribution they shouldn't have taken, and no entity shields that.

Several states have a formal creditor notice process — sometimes published, sometimes written to known creditors — which starts a clock after which claims are barred. Where it exists it's worth using, because it's what converts "probably finished" into "finished".

File with the state

The filing is usually called articles of dissolution, a certificate of dissolution, or a statement of termination, with a fee. Some states want a final annual report first, and won't accept a dissolution from a company that isn't in good standing — which occasionally means bringing a lapsed company current in order to close it.

A number of states also require tax clearance from the revenue department confirming nothing's outstanding before the dissolution is accepted. That step adds weeks, so start it early rather than discovering it at the end.

Every other state you registered in

If you foreign-qualified anywhere, each of those registrations is separate and none of them end because the home state dissolved you. The filing is usually a certificate of withdrawal or cancellation, and until it's made, that state keeps expecting reports and fees.

This is the most commonly missed step, and it surfaces years later as a delinquency notice from a state the owner had genuinely forgotten about.

Federal loose ends

File a final federal return and tick the box marking it final — Schedule C for a single-member LLC, or the partnership or S-corp return if that's how you were taxed. Do the same at state level.

If you had employees, final payroll returns and the associated deposits come with their own deadlines, and payroll taxes are the category where personal liability is most direct.

The IRS does not cancel EINs. An EIN is permanent and never reassigned. What you can do is write to the IRS to close the business account associated with it, which is the correct housekeeping step and is not the same as the number ceasing to exist.

The alternative nobody mentions

If you might use the company again, some states allow a dormant or inactive status, and in others the honest calculation is that keeping it in good standing costs one annual report and one fee a year.

Compare that against dissolving and forming again later — a new filing fee, a new EIN, new bank accounts and contracts, and a name that may not still be available. For a cheap state the maintenance route often wins. For a state with a high annual minimum it rarely does.

Common questions