How to dissolve an LLC

Approve the dissolution as the operating agreement requires, wind up the business by paying debts and distributing assets, file articles of dissolution or a certificate of cancellation with the state, then file final tax returns and close your accounts.

Dissolution starts the closing process and winding up. Termination, or cancellation, is the point when the LLC stops existing on the state record, usually after the final state filing is accepted.

You can stop operating, but the LLC stays active with the state. It can keep owing annual reports, fees and taxes, and the state may later dissolve it administratively with penalties on the record.

The state filing fee depends on the state, and some states charge nothing. Outstanding annual reports, franchise taxes or penalties may need to be paid before the state accepts the dissolution.

An EIN is never reused, but you should ask the IRS to close the business account once final returns are filed and taxes are paid. Send a letter with the LLC’s legal name, EIN, address and the reason for closing the account.

It depends on how the LLC is taxed. A multi-member LLC files a final Form 1065, an LLC taxed as a corporation files a final corporate return, and a single-member LLC owner reports the final year on their own return. A foreign-owned single-member LLC still files Form 5472 for its final year.

Each state has its own form, fee and rules. Pick your state in the list on this page to open its LLC dissolution guide.