To dissolve a limited liability company one has to take up a set of required steps. In Colorado, if you and the members of the LLC want to discontinue business, then it is necessary to dissolve their business legally to avoid any administrative and legal consequences. To dissolve an LLC in Colorado, you are required to submit a complete Article of Dissolution to the Secretary of State. Before submitting the Article of Dissolution, one must follow the operating agreement.
If you have a Colorado LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Colorado LLC is to follow the operating agreement. There are some points to be noted before proceeding with the official paperwork. At first, make sure all the members of the LLC are agreed to dissolve the business. Once all the members are ready, their consent should be recorded via voting. After casting their vote in favor of the dissolution, the legal process must be started. Here are the steps to address for dissolving Colorado LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Colorado
- After Dissolving Your LLC
- Reasons Behind Dissolution of Colorado LLC!
- Colorado LLC Dissolution Review
How to Dissolve an LLC in Colorado
Dissolution of Colorado LLC requires three broad procedural steps. Having a Colorado LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Colorado Secretary of State.
Step 1: Follow Your Colorado LLC Operating Agreement
When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. There is also a dissolution process, which is added to your agreement. The common dissolution steps that almost every LLC follows are:-
First of all, the dissolution vote will take place among the LLC members in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.
- All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
- After that, a formal date for dissolving the LLC will be decided.
- The next step is counting the LLC assets and dividing them among the stakeholders and members accordingly.
- Finally, the creditors of the business are notified, and the debts of the business are settled.
This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminating an LLC.
Get a Professional Agent Service
When it comes to a limited liability company dissolution, it is important to get professional help. The Colorado registered agent will guide you with everything you need to close your limited liability company. While choosing a registered agent make sure they have a physical street address in the state. A professional service provider helps you to file the Article of Dissolution and close your various tax accounts without any hassle. Below are the best LLC services we strongly recommend for you.
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Step 2: Close All Tax Accounts
Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.
You must contact all government entities and clear the amount of outstanding taxes due until the date you have decided for dissolution. All the taxes must be paid in advance so that you don’t face any issues in the further process of shutting down your LLC.
Some of the common taxes that limited liability companies have to pay are:
- Unemployment insurance tax
- Employee withholding tax if your LLC has employees.
- If your LLC is engaged in selling taxable goods then they are liable to pay the sales and use tax.
Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close accounts. Apart from business taxes, federal taxes, personal income taxes, and franchise taxes are to be considered. For the franchise taxes, a franchise tax form is required.
That is why the LLC owner should go through the sales tax guide and hire an accounting service. If you want to do the accounting yourself or make accounting easy, try FreshBooks.
Step 3: File Articles of Dissolution
There is a list of dissolution documents that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. Like a Colorado Articles of Organization, one has to file an Article of Dissolution. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.
- First of all, the LLC owner(s) has to file the Article of Dissolution. There is only one method of filing available, i.e. file online. To get the application form you need to visit the Secretary of State Website of Colorado state.
- In that particular SOS website, the LLC owner has to look for the Domestic LLC Articles of Dissolution page.
- If you want to dissolve Colorado Foreign LLC then look for the Foreign LLC Dissolution process.
- There is a form available on this page, which is the article of dissolution you are looking for. You have to start filling it with correct information.
- You must fill in all the important and legal information in the form, so you should be extra careful.
- Read all the instructions for online filing. The steps for dissolution will be easier if you follow the guidelines.
- After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution filing fees.
Online Filing: Colorado LLC Dissolution Form
Filing Fee: $25
The LLC you owned is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call that he accepts your expedited dissolutions or not.
Points to Be Noted When Dissolving Colorado LLC
Apart from these three steps, no major dissolution rules are there in Colorado. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.
There are some purposes of LLC that require some attention even after dissolution, known as winding up. The task of winding up includes.
- For a certain period, the property of a business requires preservation.
- If there is any civil case against the LLC, then the owner needs to finish them.
- Settle all the existing disputes of LLC.
- Transfer all the property of LLC to the names of partners.
- Release all the liabilities that the LLC owes to others.
- Rightful distribution of all the assets among members, according to their percentage of partnerships.
Cost of Dissolving LLC
LLC cost in Colorado includes the formation as well as dissolution fees. To dissolve an LLC in Colorado, LLCs have to file an Article of Dissolution. The filing fee is $25. The details are mentioned on the second page of the article dissolution filing form. Following are the ways to pay for the dissolution,
- You can select a payment pick-up option.
- There is an option of direct account transfer through your prepaid accounts.
- LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction state will make.
After Dissolving Your LLC
After you formally dissolve your LLC, your business name will not be reserved anymore. Any other business entity will be eligible to use your Colorado LLC name immediately after 120 days of dissolving your LLC. On the other hand, if you have a foreign LLC in other states, then you must comply with the SOS of the state after the dissolution of your LLC in Colorado. A registered agent can help you do the needful.
Reasons Behind Dissolution of Colorado LLC!
If you want to dissolve an LLC in Colorado, then you better do it legally. Many people think that it is so easy to stop opening the company. But guess what? That won’t be favorable for anyone, not you, your partners, or the company. There will be many consequences to that. Want to know the consequences? Check them here,
- The creditors can still ask for the money from the owners.
- There can be an outstanding amount of the tax payable.
- It will still be considered in operation, and people can raise questions.
- It will not be a possibility to sell the building of the company.
- The liability will still fall on the owners’ heads, and they can also face lawsuits because of that.
Top Businesses to Look For in Colorado!
If someone wants to start something new in colorado, they are in for a perfect business. If someone wishes to start an LLC in Colorado, they will have to look for the best industry. With the help of the best one, it will be easy to make a good economy for the state. You don’t have to go through the trouble of doing it, as we have mentioned the best ones here,
- Tech: With the help of Tech industry in Colorado, a huge number of employment opportunity has been created. It has added more than 750 jobs (average in a year) in the state. Also, it opened 350 jobs last year for the capital of the state, Denver.
- Real estate: The Real Estate Market is and has been going off the charts, and with that, it is making good money for the GDP every year. The average sale price recorded in Denver was more than $400,000, and it is not a small amount.
- Craft beer: Colorado is famous for beer crafting, and it also has hundreds of craft breweries. If we are specific, then it’s more than 300 and made $2.7 billion a year. It is raking first of all. This is something that makes a big impact on the economy positively too.
Colorado LLC Dissolution Review
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Here’s a recap of the steps you must follow when dissolving your Colorado LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Colorado LLC Operating Agreement
Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
- Close All Tax Accounts
Make sure you close all your tax accounts to avoid incurring further costs.
- File Articles of Dissolution
File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.
What is the Cost to Dissolve an LLC in Colorado
If you want to dissolve your LLC in Colorado, you will need to pay the state an administrative fee of $150. If you are using a foreign company, you can expect to pay the same fee as a domestic one. In addition, you will need to submit a list of all taxes and fees paid. If you do not file the Articles of Dissolution within the required time, you will be hit with penalties that increase over time.
The state requires that you file a dissolution statement in order to dissolve an LLC. The form costs $10 and must be submitted with the state’s SOS within 30 days of the decision to dissolve the company. You should file the dissolution in Colorado as soon as possible. The business name becomes available for use by others, so it is vital to file as soon as possible. If you wish to restore the LLC, you must file an Amend and Restate Articles of Organization.
It is also important to keep your LLC operating agreement in place and to file the appropriate forms. In Colorado, the operating agreement must be followed, so you can avoid any additional costs or liabilities. The operating agreement should also be updated to reflect any changes to the company. The state will also require the LLC to close all tax accounts. If you have an LLC that operates outside of the state, you will need to file an application in that state to dissolve.
Yes, a dissolution filing fee of $25, which Colorado SOS charges to proceed with the dissolution. Also, to proceed with the task of removal of their name from every tax list and benefits.
No, there is no requirement of revenue department clearance till the time the SOS of Colorado accepts the dissolution form.
The name will also get deregistered with the dissolution of the LLC. But the name will not be allotted for the next 120 days. After that, if some business wants to name their LLC after the name chosen by you, then it is their choice.
If you have not dissolved your LLC, you are liable for business privilege tax, and if it is not paid on time, you are leveraged with 10% of the amount of tax or $50. After that, the additional penalties will increase by $1 per month. If it goes unpaid for a longer duration, then the chances of seizing your property can also recover the tax.
Yes, if you are dissolving your LLC, you have to pay some amount to the probate judge who was also present during your LLC formation in the probate office. The minimum fee of the judge is $50, which can vary.