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

1. What Does It Mean to Dissolve an LLC in Tennessee?

Dissolving an LLC in Tennessee is the formal legal process of ending a limited liability company’s existence once dissolution documents are filed with and accepted by the Tennessee Secretary of State. Simply stopping operations, becoming inactive, or abandoning the LLC does not legally close the company.

Dissolution generally involves completing wind-down activities, filing Articles of Dissolution, settling debts and obligations, distributing remaining assets under Tennessee law or the operating agreement, and filing final federal and Tennessee tax returns so the LLC is removed from state records.

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

You should close or dissolve a Tennessee LLC when the business has permanently stopped operating, no longer plans to generate revenue, or has completed the purpose for which it was formed. Voluntary dissolution formally ends the LLC’s legal existence with the Tennessee Secretary of State and prevents the state from continuing to treat the company as an active business entity for administrative, compliance, or legal purposes.

This section explains voluntary dissolution, which is initiated by the LLC’s members or managers. Voluntary dissolution differs from administrative dissolution, which occurs when the state dissolves an LLC for statutory noncompliance, such as failing to maintain a registered agent or meet required state obligations. Choosing voluntary dissolution allows owners to control the timing of closure, properly wind down operations, resolve outstanding obligations, and reduce the risk of future notices, penalties, or legal exposure.

Common situations where dissolving a Tennessee LLC is appropriate

1. Business inactivity: the LLC has ceased operations and does not plan to conduct business in Tennessee or elsewhere
2. Member-approved closure: the members have agreed to permanently close the LLC in accordance with the operating agreement or Tennessee law
3. Business restructuring: the LLC is merging, converting to another entity type, or transitioning to a different business structure
4. Inability to continue operations: loss of required licenses, key contracts, funding, or overall business viability
5. Preventive closure: formally dissolving the LLC to avoid ongoing state correspondence, unresolved compliance issues, or future administrative complications

3. Things to Do Before Dissolving an LLC in Tennessee

Before dissolving an LLC in Tennessee, it is recommended to complete certain practical wind-down steps to ensure the business is closed properly and does not leave unresolved legal, tax, or administrative matters. While Tennessee does not require a certificate of good standing or separate dissolution approval before filing Articles of Dissolution, addressing outstanding obligations in advance can help reduce the risk of post-dissolution notices, penalties, or follow-up issues.

The steps below are recommended best practices, not formal filing requirements under Tennessee law. Completing them before submitting dissolution documents helps ensure an orderly closure before the LLC is formally dissolved with the Tennessee Secretary of State.

Pre-dissolution checklist (recommended best practices)

1. Review the operating agreement: confirm any member approval requirements, voting thresholds, or dissolution procedures outlined in the LLC’s operating agreement or, if none exists, under Tennessee law
2. Approve and document the dissolution: obtain formal approval from members and document the decision in written resolutions or meeting minutes for legal, tax, and record-keeping purposes
3. Resolve outstanding debts and liabilities: pay or make reasonable provision for obligations owed to creditors, vendors, employees, contractors, and service providers before dissolution
4. Wind down business operations: complete or terminate open contracts, notify customers where appropriate, cancel subscriptions, and prepare to close business bank accounts and payment platforms
5. Review Tennessee tax registrations and obligations: determine whether the LLC has any active tax accounts with the Tennessee Department of Revenue, such as sales and use tax or employer withholding tax, and ensure required filings and payments are completed or accounts are properly closed
6. Review federal tax filing requirements: confirm all required federal filings associated with the LLC’s EIN are current and determine whether any final federal income, employment, partnership, or information returns are required based on the LLC’s federal tax classification
7. Assess federal BOI reporting obligations (if applicable): determine whether a final Beneficial Ownership Information (BOI) update is required due to ownership or control changes. BOI reporting is a federal requirement and applies independently of Tennessee dissolution filings
8. Prepare and retain final records: organize financial records, tax filings, member approvals, and dissolution-related documents for future reference, verification, or audit purposes

These steps are recommended best practices and are not required by Tennessee before filing Articles of Dissolution. Tennessee requires only the filing of Articles of Dissolution to legally close a domestic LLC, but completing these steps helps reduce the risk of post-dissolution tax, legal, or administrative issues.

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

Closing or dissolving an LLC in Tennessee is the legal process of formally ending the company’s existence with the Tennessee Secretary of State. Simply stopping operations or allowing the LLC to remain inactive does not legally close the business. An LLC remains active in Tennessee records until Articles of Dissolution are filed with and accepted by the state.

Key point: Tennessee requires only one state filing to dissolve a domestic LLC—Articles of Dissolution. Tennessee does not require tax clearance, certificates of good standing, or proof of paid taxes before dissolution. Completing recommended wind-down steps helps reduce the risk of post-dissolution notices or follow-up issues.

1. Approve the dissolution (required by governing rules): obtain member approval as required by the LLC’s operating agreement or, if none exists, under Tennessee law, and document the approval in written resolutions or meeting records.
2. Complete wind-down activities (recommended): settle outstanding debts and liabilities, complete or terminate contracts, notify creditors or customers where appropriate, and formally cease business operations.
3. Review Tennessee tax registrations (recommended): determine whether the LLC has any active tax accounts with the Tennessee Department of Revenue, such as sales tax or employer withholding tax, and ensure required filings and payments are completed or accounts are properly closed.
4. Review federal tax and reporting obligations (recommended): confirm all required federal filings associated with the LLC’s EIN are complete and determine whether any final income, employment, partnership, or information returns are required.
5. Prepare the Articles of Dissolution (legally required): complete the Articles of Dissolution, the official form used to terminate the LLC’s legal existence under Tennessee law.
6. File the Articles of Dissolution (legally required): submit the Articles of Dissolution online with the Tennessee Secretary of State. The state filing fee is $50 for a domestic LLC dissolution. Online filings are typically processed within several business days when complete.
7. Confirm dissolution status (recommended): retain proof of filing and verify that the LLC’s status shows “Dissolved” in Tennessee business records, confirming the company is no longer active.

5. DIY vs Professional LLC Dissolution Services

Tennessee LLC owners can dissolve their business either on their own or with professional support. Tennessee’s dissolution process is generally straightforward—many single-member or inactive LLCs with no outstanding debts or unresolved obligations can complete the process independently by filing Articles of Dissolution (Domestic LLC) online with the Tennessee Secretary of State.

Professional dissolution assistance is optional under Tennessee law and is not required to legally dissolve an LLC. Whether support is beneficial depends on the LLC’s ownership structure, existing obligations, prior administrative issues, or the owner’s comfort handling final compliance and wind-down responsibilities.

Factors that may increase the complexity of dissolving a Tennessee LLC

1. Multiple members or unclear voting, approval, or dissolution provisions in the operating agreement
2. Outstanding debts, contracts, lawsuits, or unresolved creditor claims
3. Unresolved state or federal tax accounts, previous administrative dissolution, or incomplete wind-down activities

Situations where professional dissolution assistance may be helpful

1. Minimizing the risk of overlooked wind-down steps, unresolved obligations, or post-dissolution notices
2. Help reviewing Tennessee-specific filings, including Articles of Dissolution (Domestic LLC), and final compliance considerations
3. Increased confidence that the LLC is properly dissolved and no longer subject to ongoing administrative correspondence

6. Filing Fees, Processing Time, and Approval Timeline

Understanding filing fees and processing timelines helps set clear expectations when closing or dissolving an LLC in Tennessee. The dissolution process is handled through the Tennessee Secretary of State and is completed online. Once the Articles of Dissolution are submitted and accepted, the LLC is formally closed under Tennessee law.

Tennessee LLC dissolution filing fee

Tennessee charges a $50 state filing fee to dissolve a domestic LLC. Articles of Dissolution are filed online with the Tennessee Secretary of State. Tennessee does not require tax clearance, certificates of good standing, or prior approval from the Tennessee Department of Revenue before a dissolution filing.

Processing time

Articles of Dissolution filed online are typically processed within several business days when complete and accurate. Processing times may vary based on system volume, but no mailing or in-person filing is required.

When dissolution becomes legally effective

A Tennessee LLC is officially dissolved once the Tennessee Secretary of State accepts and records the Articles of Dissolution. At that point, the LLC’s status changes to “Dissolved”, and the company is no longer an active Tennessee business entity.

After approval: what to keep and verify

After dissolution is complete, retain copies of the filed Articles of Dissolution and any online confirmation issued by the state. These records may be needed for tax filings, banking closures, contract terminations, audits, or compliance verification.

If you prefer assistance with document preparation, filing review, or final compliance considerations, FormLLC can help ensure your Tennessee LLC dissolution is completed accurately and without unnecessary follow-up issues.

7. Final Tax Filings and Compliance Related to Dissolution

Although Tennessee does not require tax clearance or prior approval before an LLC can be dissolved, owners should complete any applicable final tax filings and properly close related tax accounts. Taking these steps helps reduce the risk of future notices, penalties, or enforcement actions after the LLC has been formally dissolved.

Tennessee state-level tax and closure steps

• Review active Tennessee tax registrations: determine whether the LLC has any open tax accounts with the state, such as sales tax, employer withholding tax, or unemployment insurance contributions, if applicable, and confirm whether filings or payments are required through the date business activities ended.
• Resolve outstanding Tennessee tax obligations: identify and pay any unpaid state taxes—such as sales tax or employer withholding—if applicable, along with any applicable penalties or interest.
• File final Tennessee tax returns (if applicable): submit any required final state tax returns with the Tennessee Department of Revenue and clearly mark them as final where appropriate. While tax clearance is not required for dissolution, state tax accounts should still be properly closed.
• Close Tennessee tax accounts: formally close or update any active state tax registrations—such as sales tax, employer withholding, or unemployment insurance accounts, if applicable—to prevent future filing or reporting obligations.
• Cancel state and local licenses or permits: terminate any Tennessee state or local business licenses, permits, or registrations associated with the LLC to avoid renewal notices, assessments, or unnecessary fees.

Federal tax and record-keeping considerations

• Complete final federal tax filings: file all required federal returns associated with the LLC’s EIN, including final income, partnership, S corporation, or employment tax filings, depending on the LLC’s federal tax classification.
• Retain dissolution and tax records: keep copies of final tax filings, confirmation of account closures, and the filed Articles of Dissolution for future reference, verification, audits, or compliance inquiries.

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

Simply ceasing business operations does not legally close an LLC in Tennessee. Until Articles of Dissolution are filed with and accepted by the Tennessee Secretary of State, the LLC continues to exist as a legal entity in Tennessee’s business records—even if the company is inactive or no longer conducting operations.

Failure to complete a voluntary dissolution may expose owners to continued legal, financial, and administrative risk. This is different from administrative dissolution, which occurs when the state dissolves an LLC for statutory noncompliance, such as failing to maintain a registered agent or file required state statements. Administrative dissolution is a state enforcement action and does not properly close the business or eliminate existing debts, contracts, or tax obligations.

Common consequences of not properly dissolving a Tennessee LLC

• Continued legal existence: Without filed Articles of Dissolution, the LLC remains listed as active in Tennessee Secretary of State records.
• Ongoing tax and registration obligations: If state tax accounts or registrations remain open, the LLC may continue to be responsible for Tennessee tax filings, business registrations, or account maintenance with the Tennessee Department of Revenue until the entity is properly dissolved and related accounts are closed.
• Ongoing state correspondence: Inactive LLCs may continue to receive notices, reminders, or enforcement communications from Tennessee agencies.
• Unresolved liabilities: Administrative dissolution does not eliminate responsibility for unpaid debts, contracts, or state and federal tax obligations.
• Member and financial exposure: Incomplete wind-down activities or unresolved claims can create ongoing legal or financial risk for LLC members.
• Future filing complications: Improperly closed LLCs may face delays or additional requirements when reinstating, dissolving later, or forming new businesses in Tennessee.

9. Closing a Foreign LLC Registered in Tennessee

What is a foreign LLC?

A foreign LLC is a limited liability company that was formed in another U.S. state or jurisdiction but is registered to conduct business in Tennessee. If a foreign LLC no longer conducts business or has permanently ceased operations in Tennessee, it must formally withdraw its registration to end its legal authority to transact business in the state.

Withdrawal vs. dissolution

Tennessee does not recognize a “foreign LLC dissolution.” Instead, a foreign LLC must file for withdrawal to terminate its authority to conduct business in the state. Withdrawal does not dissolve the LLC in its home state—it only ends the company’s legal presence in Tennessee.

To withdraw, the LLC must file an Application for Withdrawal (Foreign LLC) with the Tennessee Secretary of State. Any dissolution or permanent closure of the LLC itself must be completed separately under the laws of the state or jurisdiction where the LLC was originally formed.

Common requirements to withdraw a foreign LLC from Tennessee

• File an Application for Withdrawal (Foreign LLC) with the Tennessee Secretary of State
• Pay the applicable Tennessee state filing fee for foreign LLC withdrawal, as set by the Tennessee Secretary of State at the time of filing
• Resolve any outstanding Tennessee tax obligations, if applicable, such as sales tax, employer withholding tax, or unemployment insurance contributions, through the Tennessee Department of Revenue
• Confirm the LLC’s status in its home state remains active, withdrawn, or properly dissolved, as required by that jurisdiction

After withdrawal is approved

• The foreign LLC is no longer authorized to conduct business in Tennessee
• Registration with the Tennessee Secretary of State ends, and the LLC is removed from Tennessee’s active business records
• Proof of withdrawal should be retained for tax records, banking matters, audits, and future business registrations

10. Conclusion

Closing or dissolving an LLC in Tennessee is a formal legal action that permanently ends the business’s existence under state law. Simply stopping operations is not enough—an LLC remains active in Tennessee records until Articles of Dissolution are filed with and accepted by the Tennessee Secretary of State.

By completing recommended wind-down steps, addressing any remaining tax obligations, and filing Articles of Dissolution, LLC owners can close their businesses with confidence and reduce the risk of future notices or follow-up issues. Although Tennessee’s dissolution process is relatively straightforward and handled online, accuracy matters. If you prefer guided assistance, FormLLC can help ensure your Tennessee LLC is dissolved correctly and without unnecessary delays.