How to Dissolve an LLC in Delaware
If you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble.
To dissolve an LLC in Delaware, simply follow these three steps:
Step 1: Follow Your Delaware LLC Operating Agreement
For most LLCs, the steps for dissolution will be outlined in the operating agreement. Some common dissolution steps include:
- Holding a vote with LLC members to dissolve the LLC
- Recording the dissolution vote in the LLC’s meeting minutes
- Determining the formal date of dissolution
- Distribution of LLC assets
- Notifying creditors and settling any business debts
If your LLC does not have any set dissolution procedures in its operating agreement, you should consult the state for further instruction.
Step 2: Close Your Business Tax Accounts
Every active Delaware LLC has various tax accounts that are maintained by different departments within the Delaware State government. Before you can dissolve your LLC, you must first pay off all taxes and/or fines owed to these accounts.
Here are some of the common taxes your LLC may owe:
- Delaware Franchise Tax
- If you have or have had employees in Delaware:
- Unemployment Insurance Tax
- Employee Withholding Tax
- Delaware Gross Receipts Tax
Closing your tax accounts usually involves simply filing a final return to the appropriate agency. However, some accounts require submitting other official paperwork. If you need assistance in closing your tax accounts, it may be helpful to hire a Certified Public Accountant.
NOTE: None of your LLC's tax accounts can be closed if they have a remaining balance. All taxes, penalties, fees, and interest must be paid in full before you can dissolve your LLC.
Step 3: File Articles of Dissolution
Articles of Dissolution, known in Delaware as Certificate of Cancellation, are the forms that you file to voluntarily dissolve your LLC. Once this document has been filed and processed, your LLC will no longer legally exist.
Delaware requires business owners to submit their Certificate of Cancellation by mail or in person.
OPTION 1: File by mail or in person
- OR -
OPTION 2: File online
Filing Fee: $200
Mail or deliver in person to:
Delaware Division of Corporations
401 Federal Street – Suite 4
Dover, DE 19901
You can also have a professional service provider file your Articles of Dissolution for you. Incfile prepares the Articles of Dissolution for you, and files them to the state for $149 + State Fees.