Dissolving an LLC

Whether you run into cash flow trouble, or your attention turns elsewhere, dissolving an llc can seem like a complicated task if

you don't know where to begin. There are a number of specific forms that you will need to fill out.

Dissolving an LLC - Asset Breakup

Depending on the reason that you wish to dissolving an LLC, you will need to first figure out how much each individual person's stake in the LLC is, and also to determine the asseys of the LLC's. If you are the only person in your LLC, then there is a number of steps that you need to finish to completely dissolve your LLC.

Dissolving an LLC - Procedure

These steps do not need to be completely in any particular order, but they must all be completed in order to avoid any type of personal liability. Formal corporate action, filing IRS form 966, a number of filings to your state office (the exact paperwork that is required to be sent in varies by state), sending out a notice to any creditors that gives information on where to send their claims to, as well as processing all creditor claims, and finally the liquidation of the assets of the LLC.

If you are having problems with other partners or members in your business, you are in for a much more involved process. Dissolving an llc in this case often requires going to court, unless you can get two thirds of your shareholders to approve the action. If you do, you will go through the steps to dissolve the LLC. If not, you will need to petition to your state court system and try to get a court order to dissolve the LLC.

Selling or assigning your interest in the LLC is not dissolving it by will. You must essentially resign yourself from all relationships with the LLC. Generally most state statutes do not give you a default right to recover your investments and contributions unless you contracted for them when you formed the LLC.

Dissolving an LLC - Courts

When you go to court, you will need to be very careful when dissolving an LLC. It will take time and money, and you might possibly still have to split the LLC assets with each partner. You can also either offer to buy their interest in the LLC or offer your own interest in the business up for sale. That just all depends on whether you want to keep the business alive or not.

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