How to Close or Dissolve an LLC in Delaware: Forms, Fees & Process

1. What Does It Mean to Close or Dissolve an LLC in Delaware?

Closing or dissolving an LLC in Delaware is the formal step of ending a limited liability company’s legal existence by filing a Certificate of Cancellation with the Delaware Secretary of State. Until acceptance, the LLC continues to appear active on state records.

Dissolution generally requires winding down operations, paying obligations, and completing final federal and Delaware tax filings. Delaware imposes a $300 annual franchise tax that accrues until dissolution is finalized, and tax clearance is not required before filing documents.

2. When Should You Close or Dissolve a Delaware LLC?

You should close or dissolve a Delaware LLC when the business is no longer operating, has stopped generating income, or has fulfilled its original purpose. Formally dissolving the LLC ensures the state does not continue to treat the company as active or assess ongoing franchise tax obligations or compliance notices related to the business.

Common situations where dissolving a Delaware LLC is appropriate

1. Business inactivity: the LLC has ceased operations and is no longer conducting business in Delaware or elsewhere
2. Member decision: the LLC’s members have formally agreed to permanently close the company in accordance with the operating agreement or Delaware law
3. Business restructuring: the LLC is merging, converting to a different entity type, or transitioning to a new business structure
4. Inability to continue operations: loss of required licenses, contracts, funding, or overall business viability
5. Proactive closure: formally ending the LLC to stop future Delaware franchise tax accruals and avoid ongoing administrative or compliance issues

3. Things to Do Before Dissolving an LLC in Delaware

Before closing or dissolving an LLC in Delaware, it’s important to complete several preparatory steps to ensure the dissolution is effective and does not leave unresolved obligations behind. Proper preparation helps avoid delays, incomplete wind-downs, or continued franchise tax exposure after the LLC is closed with the Delaware Secretary of State. While Delaware does not require tax clearance before dissolution, any remaining state and federal tax matters should be addressed separately.

Pre-dissolution checklist

1. Review the operating agreement: confirm member approval requirements, voting thresholds, and any dissolution procedures required under the LLC’s governing documents or Delaware law
2. Approve and document the dissolution: obtain formal member consent and record the decision in writing through resolutions or meeting minutes for legal and record-keeping purposes
3. Settle outstanding debts and liabilities: pay, resolve, or make provisions for obligations owed to vendors, lenders, employees, and service providers before closing the business
4. Wind down business operations: complete open contracts, notify customers or clients, cancel subscriptions, and prepare to close business bank accounts
5. Review Delaware tax obligations: ensure all required Delaware tax filings are submitted and any outstanding obligations—such as income tax, sales tax, employer withholding, or the annual LLC franchise tax—are resolved with the appropriate tax authorities
6. Review federal tax status: confirm all federal tax filings tied to the LLC’s EIN are current and determine whether any final federal returns or employment tax filings are required
7. Assess federal BOI reporting obligations (if applicable): determine whether a final Beneficial Ownership Information (BOI) update is required based on ownership or control changes prior to dissolution
8. Prepare and retain final records: organize financial statements, tax filings, member approvals, and dissolution-related documents for future reference, verification, or audit purposes

Completing these steps before filing a Certificate of Cancellation with the Delaware Secretary of State helps ensure the LLC is properly closed and reduces the risk of post-dissolution tax, legal, or administrative issues.

4. Step-by-Step: How to Close or Dissolve an LLC in Delaware

Closing or dissolving an LLC in Delaware involves formally ending the company’s existence with the Delaware Secretary of State and properly winding down the business. While Delaware does not require tax clearance before dissolution, all outstanding franchise taxes and other state or federal tax obligations should be resolved to avoid future notices or enforcement issues.

1. Approve the dissolution: obtain member approval in accordance with the LLC’s operating agreement or, if none exists, Delaware law, and document the decision in writing
2. Wind down business affairs: settle outstanding debts, resolve or terminate contracts, notify creditors if required, and cease business operations
3. Pay Delaware franchise tax and resolve state tax obligations: ensure all annual Delaware LLC franchise taxes are paid through the year of dissolution and resolve any outstanding state tax obligations, such as income tax, sales tax, or employer withholding, with the appropriate tax authorities
4. Review federal tax and reporting requirements: confirm all federal tax filings associated with the LLC’s EIN are complete and determine whether any final federal returns or reporting updates are required
5. Prepare the Certificate of Cancellation: Delaware LLCs are dissolved by filing a Certificate of Cancellation with the Delaware Secretary of State, which formally terminates the LLC’s legal existence
6. File the Certificate of Cancellation: submit the Certificate of Cancellation through the Delaware Secretary of State’s online filing system. The standard state filing fee for LLC cancellation is $200. Filings are typically processed the same day or within one business day
7. Confirm the LLC is officially closed: retain proof of filing and verify the LLC’s status shows “Canceled” in Delaware Secretary of State records, confirming the company is no longer active

5. DIY vs Professional LLC Dissolution Services

Delaware LLC owners can either handle the dissolution process themselves or use professional assistance. While Delaware’s filing process is relatively straightforward, the right option depends on the LLC’s ownership structure, outstanding obligations, and the risk of unresolved franchise tax, compliance, or post-closure issues.

What typically increases Delaware LLC dissolution complexity?

1. Multiple members or unresolved ownership interests
2. Outstanding debts, contracts, or contingent liabilities
3. Unpaid Delaware franchise taxes or unresolved state or federal tax matters

Why many owners choose professional dissolution support

1. Reduced risk of missed steps, incorrect sequencing, or incomplete wind-down
2. Clear guidance on Delaware-specific requirements, including the Certificate of Cancellation
3. Greater confidence that the LLC is fully closed and no longer subject to franchise tax accruals, notices, or administrative complications

6. Filing Fees, Processing Time, and Approval Timeline

Understanding filing fees and processing timelines helps set realistic expectations when closing or dissolving an LLC in Delaware. While the filing process itself is relatively fast, the overall timeline depends on whether franchise taxes are current and how quickly documents are submitted and accepted by the Delaware Secretary of State.

Delaware LLC dissolution filing fee

Delaware charges a $200 state filing fee to dissolve an LLC. Dissolution is completed by filing a Certificate of Cancellation with the Delaware Secretary of State. In addition, all annual Delaware LLC franchise taxes ($300 per year) must be paid through the year of dissolution before the cancellation will be accepted. Delaware does not require tax clearance from the Delaware Department of Revenue prior to filing.

Processing time

Certificate of Cancellation filings submitted online are typically processed the same day or within one business day, provided all franchise taxes are paid and the filing is submitted correctly. Expedited processing options may be available for an additional fee if faster confirmation is needed.

When the LLC is officially closed

A Delaware LLC is considered officially closed once the Delaware Secretary of State accepts and records the Certificate of Cancellation. At that point, the LLC’s status in state records will show as “Canceled”, and ongoing franchise tax accruals and entity-level compliance obligations generally end.

Post-approval considerations

After cancellation is approved, retain copies of the filed Certificate of Cancellation and the acceptance confirmation from the Delaware Secretary of State. These documents may be required for future tax matters, banking closures, contract terminations, audits, or legal verification.

If you prefer assistance with document preparation, payment sequencing, or filing coordination, FormLLC can help ensure your Delaware LLC dissolution is completed accurately and without unnecessary delays or compliance issues.

7. Final Tax Filings and Compliance Before Dissolution

• Pay all Delaware LLC franchise taxes: Delaware LLCs are subject to an annual franchise tax of $300, which must be paid through the year of dissolution. Franchise taxes continue to accrue until the LLC files a Certificate of Cancellation and is officially closed with the Delaware Secretary of State.
• File final Delaware tax returns (if required): submit any required final Delaware income tax returns for the LLC through the Delaware Department of Revenue and clearly mark them as final if applicable. Not all LLCs owe Delaware income tax, but any registered tax accounts must be properly closed.
• Complete final federal tax filings: file all required federal returns associated with the LLC’s EIN, including final income, partnership, or employment tax filings, depending on how the LLC is taxed
• Resolve outstanding state tax obligations: pay any unpaid Delaware state taxes, such as income tax, sales tax, or employer withholding, along with any applicable penalties or interest
• Close Delaware tax accounts: formally close or update any active Delaware Department of Revenue accounts tied to the LLC, including sales tax licenses or employer withholding accounts, if applicable
• Cancel licenses and permits: terminate any Delaware state or local licenses, permits, or registrations associated with the business
• Retain compliance records: keep copies of final tax filings, franchise tax payment confirmations, and the filed Certificate of Cancellation for future reference, verification, or audit purposes

8. What Happens If You Don’t Properly Dissolve an LLC in Delaware?

Simply stopping business operations does not legally close an LLC in Delaware. If a Certificate of Cancellation is not filed and accepted by the Delaware Secretary of State, the LLC may continue to be treated as an active entity in state records, even if the business is no longer operating.

• Continued active or void status: Without a filed Certificate of Cancellation, the LLC may remain listed as active or be marked “Void” for nonpayment of franchise taxes with the Delaware Secretary of State
• Ongoing franchise tax liability: Delaware LLCs are subject to a $300 annual franchise tax, which continues to accrue each year until the LLC is formally canceled
• Void status does not close the LLC: An LLC marked void for nonpayment of franchise tax is not dissolved and remains legally responsible for outstanding debts, contracts, and tax obligations
• Member liability exposure: Unresolved contracts, creditor claims, or incomplete wind-down activities can create ongoing legal or financial risks for LLC members
• Future filing complications: An improperly closed LLC can complicate future reinstatements, dissolutions, or new entity registrations in Delaware and may require payment of back taxes and penalties

9. Closing a Foreign LLC Registered in Delaware

What is a foreign LLC?

A foreign LLC is a limited liability company that was formed in another U.S. state or jurisdiction but registered to conduct business in Delaware. If a foreign LLC no longer conducts business or has ceased operations in Delaware, it must formally withdraw its registration with the state to end Delaware-specific compliance and tax obligations.

Withdrawal vs. dissolution

Withdrawing a foreign LLC from Delaware does not dissolve the company in its home state. Instead, the LLC must file a Certificate of Withdrawal of a Foreign LLC with the Delaware Secretary of State. Any dissolution or permanent closure of the LLC itself must be completed separately in accordance with the laws of the state or jurisdiction where the LLC was originally formed.

Common requirements to withdraw a foreign LLC from Delaware

• File a Certificate of Withdrawal of a Foreign LLC with the Delaware Secretary of State
• Pay all outstanding Delaware LLC franchise taxes through the year of withdrawal
• Resolve any outstanding Delaware tax obligations, such as income tax, sales tax, or employer withholding, through the Delaware Department of Revenue, if applicable
• Confirm the LLC remains active, withdrawn, or properly dissolved under the laws of its home state, as required

After withdrawal is approved

• The foreign LLC is no longer authorized to conduct business in Delaware
• Delaware Secretary of State registration and franchise tax obligations end
• Proof of withdrawal should be retained for tax records, banking matters, audits, and future registrations

10. Conclusion

Closing or dissolving an LLC in Delaware is a critical legal step to formally end your business and prevent ongoing franchise tax liability or administrative complications. Simply stopping operations is not enough—an LLC remains active in Delaware state records until it is properly closed with the Delaware Secretary of State.

By following the correct process, paying all required franchise taxes, filing a Certificate of Cancellation, and completing any remaining tax or wind-down steps, LLC owners can close their businesses with confidence. If you prefer guided support, FormLLC can help ensure your Delaware LLC is closed correctly and without unnecessary delays, penalties, or future compliance issues.