How to Close an LLC (And Not Get Burned)

Closing an LLC can be done for various reasons. Usually, an LLC goes through a business lifecycle – it is established, business is conducted, and it terminates. Unlike corporations, the business usually will not go on forever – a trait known as perpetual duration.

I can assist you with closing an LLC or forming an LLC. It is your choice. Before you make either decision, find out more about the dissolution of an LLC business.

Schedule an appointment with me, at your convenience, so you can make this transition easier. Contact me at sam@mollaeilaw.com today.

 

Can Closing an LLC Hurt You Financially?

When you plan on closing an LLC, you will need to comply with the operating agreement that was established – a contract that set forth when and how your LLC will close. The operating agreement is designed to outline liquidation and how the remaining assets are distributed to members. 

If you don’t have an operating agreement in place, you will need to follow your state’s statue with respect to default. Moreover, state statutes stipulate certain requirements that must be followed – requirements that cannot be changed by an operating agreement.

So, if you are worried about your outcome financially, you will need to review the contingencies in your operating agreement. I can assist you with finding out what you need to know to proceed with terminating an LLC. Again, you can always reach me by email at sam@mollaeilaw.com.

 

Is Closing an LLC the Same as Terminating a Company?

Closing an LLC is a term that refers to dissolving a company. Dissolution is not the same as a termination. In fact, closing an LLC or dissolution is the initial step in an LLC’s termination procedures. 

Therefore, dissolution does not end an LLC’s existence. This is important to note, as you are still responsible for taxes and expenses. Instead, dissolution changes the reason for the LLC’s existence.

A dissolved LLC is not used to conduct business. It exists for winding up the company’s affairs and liquidating a business’s assets.

 

What Events Trigger Closing an LLC?

In most instances, a vote by LLC members will trigger closing an LLC. Before this vote is taken, it is essential that members read the operating agreement. I

t should set forth the percentage of members who need to approve the dissolution. It may also require that a meeting be held or notice is posted, as well as other formalities.

If your operating agreement does not detail closing an LLC, the state’s LLC Act will supplant the provisions. State laws can vary in this respect.

That is why you need to count on a lawyer to ensure that everything is done in compliance. Again, don’t hesitate to email me at any time. I can be reached 24/7 at sam@mollaeilaw.com.

Dissolution, as noted, starts with a triggering event. Once the event happens, the LLC stops conducting business and winds up its activities. In some instances, this triggering event may occur when an LLC is created for a certain purpose.

For instance, an LLC may be created to hold a piece of real estate until its sale. Upon the sale of the property, the LLC will dissolve.

 

Winding Up the LLC’s Business

Knowing the above information can help you stay afloat while you winding up your business affairs during the termination process. Once closing an LLC takes place, LLC members must wind up the affairs. To follow the process, they must do the following:

• Discharge the LLC’s obligations, debts, and other liabilities
• Settle and close the LLC’s activities
• Distribute the LLC’s assets

This part of the termination process is not easy. You have to do a number of things, some of which include the following:

• Notifying LLC creditors about the dissolution
• Closing out the bank accounts
• Canceling the permits, licenses, or assumed names
• Paying creditors and establishing reserves for payment
• Paying the taxes
• Filing the final reports and taxes
• Withdrawing from the state where an LLC is registered as a foreign LLC

 

Will Closing an LLC Finally End Once the Taxes are Paid?

Yes, closing an LLC and terminating the entity depends on the payment of taxes. No state will permit an LLC to terminate until this obligation is paid.

A tax clearance requirement exists to ensure that LLCs meet their taxation requirements.

Upon request, you can ask the state’s tax department to issue a document that states that the LLC owes no taxes. The document must be filed with the Secretary of State’s Office.

 

When Do You Know Closing an LLC Has Been Finalized?

Closing an LLC has been completed after you follow all the steps in the winding-up process. Any LLC that is going out of business must take the steps needed to officially terminate. 

As long as an LLC exists, even if it is dissolved, it still is liable for taxes and needs to provide annual reports. If you don’t follow the winding-up steps to terminate your LLC, you can get burned legally and financially.

 

Why You Need My Legal Help in Terminating Your LLC

That is where I can help. I will do all that I can to ensure that your LLC is officially ended. Without my help, you could get sued.

You also are at an increased risk of having your identity stolen. By using my legal services, you can obtain help with filing a dissolution, going through the winding-up steps for termination, and filing the proper withdrawal documents, including annual reports. 

If you wish to obtain tax clearances and cancel business licenses or assumed names, you also need to contact me. Allow me to interpret what needs to be done to ensure that closing an LLC can be performed effectively. Contact me today at sam@mollaeilaw.com with all your questions and concerns. 

I can help you determine what you need to do, per your operating agreement, and help you go from there. As long as you have a legal advocate supporting closing an LLC, you will do so without any worry of legal or financial repercussions.

Contact me at my email so we can sit down and review the terms of your LLC’s operating agreement. Once we know what is stipulated in the contract, we can outline and plan the steps needed for winding down the business and ending the LLC.