How to dissolve an LLC by state

Dissolving an LLC is a multi-step process that touches your state Secretary of State, the IRS, your state tax authority, and your registered agent. The order matters — if you close your bank account before paying outstanding debts, you complicate the debt-settlement process. If you cancel your registered agent before filing dissolution, you may miss state notices. Here's the correct sequence.

Step 1: Vote to dissolve (if multi-member)

For a single-member LLC, you as the sole owner decide to dissolve — no formal vote required, though documenting the decision in writing is good practice. For a multi-member LLC, dissolution typically requires a vote of the members per the operating agreement. Most operating agreements require a majority or supermajority vote; some require unanimity. Check your operating agreement before proceeding. Document the vote in a written resolution or meeting minutes.

Step 2: Wind up business operations

• Complete or formally terminate open contracts
• Notify customers, vendors, and partners that the LLC is closing
• Collect all outstanding receivables
• Cancel subscriptions, licenses, and recurring services
• Return or dispose of any client property
• Cancel business licenses and permits (city, county, state)
• Stop accepting new work under the LLC

Step 3: Settle all debts and liabilities

Pay all outstanding business debts before distributing remaining assets to members. This is both legally required and practically important — if you distribute assets to yourself before paying creditors, creditors may be able to pursue you personally for those distributions (fraudulent transfer). Priority order: pay employees (wages, benefits), pay secured creditors (lenders with collateral), pay unsecured creditors (vendors, credit cards), then distribute remaining assets to members.

Step 4: File final tax returns

• Federal: file your final Form 1040 Schedule C (for disregarded-entity SMLLCs) or final Form 1065 (for multi-member LLCs taxed as partnerships), checking the "final return" box
• If S-corp election: file final Form 1120-S and issue final K-1s to all shareholders
• State income tax: file a final state income tax return for the year of dissolution in your state of formation and any states where you had operations
• Payroll tax: if you had employees, file final Form 941 and W-2/W-3 forms
• Sales tax: file a final sales tax return and close your sales tax account with your state
• Cancel your EIN: technically optional (EINs never expire), but you can notify the IRS by mail that the account is no longer needed

Step 5: File Articles of Dissolution with your state

This is the official legal act that terminates your LLC's existence in the state's records. The filing is usually called Articles of Dissolution, Certificate of Dissolution, or Certificate of Termination depending on the state. Most states have an online form on the Secretary of State website.

• Find the dissolution form on your state's Secretary of State website
• You'll typically need: LLC name, state of formation, date of formation, date of dissolution, statement that debts have been settled
• Pay the dissolution fee ($0–$200 depending on state)
• Processing time: 1–10 business days online, 2–6 weeks by mail
• Request a Certificate of Dissolution as proof — some states issue one automatically, others you must request

Dissolution fees by state (representative examples)

Step 6: If registered in multiple states, withdraw from each

If your LLC was registered as a foreign LLC in other states, you must file a "withdrawal," "cancellation," or "termination" in each of those states separately. Each state has its own withdrawal form and may charge a small fee ($10–$100). Failing to withdraw means those states keep charging annual fees and penalties even after your home state dissolution.

Step 7: Cancel your registered agent and close the bank account

• Notify your commercial registered agent that the LLC is dissolving and cancel the service — stop future billing
• Wait until dissolution is confirmed before canceling the RA, in case state notices arrive during the process
• Close the LLC business bank account after all transactions have cleared and final tax refunds (if any) have been received
• Shred or securely archive LLC records: keep Articles of Organization, operating agreements, all tax returns, and financial records for at least 7 years

What happens if you just stop paying annual fees?

Most founders don't formally dissolve — they just stop. This is a mistake. Here's what happens:

• Annual fees and late penalties keep accruing — some states charge $50–$200/year in penalties on top of the annual report fee
• The LLC gets administratively dissolved (in most states after 1–3 years of non-payment) — but that's not the same as voluntary dissolution, and you still owe back fees
• If the LLC is administratively dissolved, you can't use it in any legal proceedings and may have trouble reinstating it if needed later
• Creditors can still reach you through the LLC's shell — the liability protection for past actions doesn't disappear, but the entity still technically exists in most states until formally dissolved
• Tax obligations don't stop until you file final returns — the IRS and state tax authorities can still pursue you for unfiled returns even years later

Converting or merging instead of dissolving

If you're not closing the business entirely but changing its structure, you may not need full dissolution. Options: (1) Convert the LLC to a corporation (available in most states) — useful if you're raising venture capital and need a C-corp; (2) Merge the LLC into another entity — useful when consolidating multiple LLCs; (3) Change the state of formation via domestication — move the LLC from one state to another without forming a new entity.

Don’t want to file yourself? Northwest Registered Agent files your LLC for $39 + state fee and acts as your registered agent the first year free.