To dissolve a limited liability company one has to take up a set of required steps. In Connecticut, 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 Connecticut, 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 an LLC in CT (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Connecticut 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 Connecticut LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Connecticut
- After Dissolving Your LLC
- Reasons Behind Dissolving Connecticut LLC!
- Connecticut LLC Dissolution Review
How to Dissolve an LLC in Connecticut
Dissolution of Connecticut LLC requires three broad procedural steps. Having a Connecticut LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Connecticut Secretary of State.
Step 1: Follow Your Connecticut 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 Connecticut 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 closing your various tax accounts without any hassle. Below are the best LLC services we strongly recommend for you.
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, especially business entity tax account, 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 their 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.
While dissolving the Connecticut LLC, the owner does not require to obtain a tax clearance certificate. However, if you have filed federal taxes, then you must go through the final return option on your IRS form.
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 Connecticut Certificate of Formation, one has to file Connecticut LLC Articles 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 are multiple methods of filing available, such as file by mail, in-person drop, or/and online filing. To get the application form you need to visit the Secretary of State Website of Connecticut state.
- You can follow the filing instruction on the official portal so that the steps for dissolution will be easier to complete.
- In that particular SOS website, the LLC owner has to look for the Domestic LLC Articles of Dissolution page.
- If you want to dissolve Connecticut 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 download that pdf form and start filling it.
- You must fill in all the important and legal information in the form, so you should be extra careful.
- 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.
- After filling in every detail, one should submit the form through an official mail address and make a payment.
- It takes 3-5 business days after filing of articles of dissolution if you are filing it by mail or in-person.
Commercial Recording Division
Connecticut Secretary of the State
P.O. Box 150470
Hartford, CT 06115-0470
Online FIling: Connecticut Online LLC Dissolution
Filing Fee: $50
Commercial Recording Division
Connecticut Secretary of the State
30 Trinity Street
Hartford, CT 06106
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 Connecticut LLC
Apart from these three steps, no major dissolution rules are there in Connecticut. 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 Connecticut includes the formation as well as dissolution fees. To dissolve an LLC in Connecticut, LLCs have to file an Article of Dissolution. The filing fee is $50. 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 Connecticut 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 Connecticut. A registered agent can help you do the needful.
Reasons Behind Dissolving Connecticut LLC!
There can be so many businesses at a place, which means it will be normal to compete. So if there is so much competition, the company will not make a lot of money. It can lead the company to decide on dissolution. It will be essential to dissolve an LLC in Connecticut and do it adequately too. Here are some other possible reasons that it happens,
- There is a deadlock in the decisions of the partners and the directors.
- It is not possible to get a good profit out of the company.
- The company keeps on drowning in the debts.
- It is a continuous need to slack off some employees.
- One of the partners wants a way out of the company.
Top Businesses to Look For in Connecticut!
There are so many states, and every state has a lot of industries. It is the same with Connecticut. It also has a lot of sectors, but they all contribute differently to the economy. So, if someone wants to start an LLC in Connecticut, it will be essential to check the facts. With facts, it will be easy to keep going on with the company and keep providing jobs. So, we have researched for you; go and check them here below!
- Finance and renting: Finance is a pretty vital industry in Connecticut. It made a contribution of $68.98 billion to the GDP last year. This thing makes the sector a great choice for a new business.
- Business services: Business services, especially service sectors are a booming industry in Connecticut. The contribution of business services in annual GDP is $30.94 billion, which is a lot more than what the government has made. The business services and finance industry go hand in hand, which is why they positively impact the economy.
- Manufacturing: The manufacturing industry is one of the fastest-growing sectors in Connecticut. It represents the annual GDP by $26.2 billion and helps the state grow and get to the stage of fully developed.
Connecticut LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Connecticut LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Connecticut 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 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 Connecticut
To dissolve an LLC in Connecticut you need to file the Articles of Dissolution with the Connecticut Secretary of State by mail, in-person or online and pay a filing fee of $50.
If you’ve decided to dissolve your LLC, the cost to dissolve an LLC varies depending on the type of entity. In general, you’ll need to pay any outstanding debts and close any business entity tax accounts. The Secretary of State’s office will process your dissolution documents within three to five business days. However, if you need to get the process done faster, you can pay a fee of $50 to expedite the process.
Before you dissolve an LLC in Connecticut, you should contact the Department of Revenue Services (DRS). They’ll need to receive a notification letter from the SOTS, appoint a new registered agent, and pay your company’s taxes. If you don’t follow these steps, the Department of Revenue Services will classify your LLC as being in default. You can also incur late fees if you don’t re-register your business entity tax account. If you decide to dissolve your LLC, you’ll also have to pay a $250 minimum tax.
In Connecticut, you can file a dissolution certificate for $149, plus state fees. An LLC certificate must state the official business name, effective date, and contacts in the state. Additionally, you may have to pay the Connecticut Business Entity Tax (BET). A final, necessary step is to notify other interested parties and distribute assets. In addition, you’ll need to notify any creditors that you’ve dissolved the LLC.
In addition to filing an application for dissolution, you’ll also need to pay for an EIN, which is necessary for opening a bank account. The State of Connecticut also requires you to pay for self-employment and payroll taxes. The state’s Business Taxes website provides more information on these fees.
When you’re ready to dissolve an LLC in Connecticut, you must follow the operating agreement. To do so, you need to get the consent of all members. Once you’ve gotten this consent, you’ll need to file the documents with the Connecticut Secretary of State.
The Connecticut LLC Act provides grounds for judicial dissolution. In addition to the above-mentioned reasons, you can file for judicial dissolution in Connecticut if you feel your business has become oppressive to members. The Connecticut LLC Act also includes provisions that allow you to dissolve an LLC for violating the law.
You must also decide on a name for your LLC. Your LLC should have a name that is unique in the state of Connecticut. You can check if the name you want to use is available in the state by searching the Connecticut Business Entity Search page. Choosing a name is an important step in starting a business.
Yes, the fee is no more than $50, which Connecticut SOS charges to dissolve the legally registered LLC and proceed with removing their name from every tax list and benefits.
No, there is no requirement of revenue department clearance till the time the SOS of Connecticut 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.
Limited liability companies reduce owners’ personal liability. Having an LLC is quite cost-effective. However, if it is required to close down the business, then the dissolution process should be done legally. Get a professional service to get everything done. We hope this article helps you to close your LLC in Connecticut. If you have any query do let us know in the comment box.