How to Wind Up an LLC

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When you file the paperwork with a state in order to register a limited liability company (LLC) you have the option of giving the business a date of dissolution or of having the LLC last into perpetuity. While you may have hoped your business would be exist perpetually, some things may happen that cause you to dissolve your business, such as insolvency or a desire to end the business. Regardless of whether you have specified a date of dissolution, or if you must file Articles of Dissolution for your LLC, you must wind up your LLC business affairs.

Consult the jurisdiction's limited liability company law. All LLCs are created pursuant to state law and governed by state law, and every jurisdiction's laws concerning LLCs are different. Locate the LLC law for the state in which you organized your company. The law will state the legal steps for winding up your LLC.

Inform the state that the LLC intends on dissolving. How you do this will be governed by the state LLC statute.

Cease taking on new business. Once you have begun the winding down process, do not enter into any new contracts.

Review your operating agreement. The operating agreement that you created when you first formed the LLC will, in most cases, detail the particular procedure for winding up your business, such as who is in charge of paying off debts, and the order in which creditors will be paid.

Gather the business' assets. After determining what assets the business has, sell them and gather the proceeds to pay creditors.

Satisfy the debts owed to creditors. Some states may also require businesses to take out advertisements, or other forms of notification, to put all creditors on notice that LLC is ending so that they can collect debts.

File any additional necessary paperwork with the state. Review the state statute to make sure that you have filed all necessary paperwork, and determine if you must submit other forms noting that your debts have been satisfied and your business is concluded.

Tips & Warnings

  • Consult an attorney and an accountant when you begin the process of ending your LLC to ensure that you comply with all necessary state laws. Read and follow all directions that accompany any forms that you must file.

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