How to Dissolve an LLC in Delaware | LLC Closing Guide


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To dissolve a limited liability company one has to take up a set of required steps. In Delaware, 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 Delaware, 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.

how to dissolve an llc in delaware

If you have a Delaware LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Delaware 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 Delaware LLC.

How to Dissolve an LLC in Delaware

Dissolution of Delaware LLC requires three broad procedural steps. Having a Delaware LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Delaware Secretary of State.

Step 1: Follow Your Delaware 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 Delaware 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.

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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, 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.

Tax clearance

While dissolving the Delaware 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. 

The IRS form for the LLC that are classified as partnerships is form 1065, and those LLC’s who have registered themselves as corporate should check IRS form 1120.

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 Delaware Certificate of Formation, one has to file Delaware 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 Delaware 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 Delaware 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. For the online filing, one can upload the pdf files on their official portal.

Mail to or In-person Drop,

Delaware Division of Corporations
401 Federal Street – Suite 4
Dover, DE 19901

Online FIling: Delaware Online LLC Dissolution

Filing Fee: $200


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 Delaware LLC

Apart from these three steps, no major dissolution rules are there in Delaware. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.

Winding Up

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 Delaware includes the formation as well as dissolution fees. To dissolve an LLC in Delaware, LLCs have to file an Article of Dissolution. The filing fee is $200. 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 Delaware 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 Delaware. A registered agent can help you do the needful.

Reasons Behind Dissolving Delaware LLC!

People always go for a business they see the potential in. but it is not always true that it will all work out. So that is why they come to an extent where they have to dissolve the company. If anyone wants to dissolve an LLC in Delaware, they have to do it properly. There are many reasons why they can come to that point. Let’s take a look at some of them,

  • There can be a disagreement between the staff or the owners of the LLC.
  • The less inflow of cash in the business can lead to a voluntary dissolution of the company.
  • The goal of the company may be accomplished, and there is no more need. 
  • The death of any partner can also be a reason for the deed of dissolution.
  • The debt that the company is not being able to pay is such a significant factor. So if the company wants to get over that, they can dissolve the company. 

Top Businesses to Look For in Delaware!

It is all about how someone gets to increase the economy of the state. It is not done by the typical businesses too much, but with the help of the main sectors of the state. It is all about how someone wants to start an LLC in Delaware and make more money. So just like that, there are some sectors of the state that help it grow. Here they are,

  1. Agriculture: Being the primary sector, Agriculture has been the largest industry in Delaware. The contribution to the annual GDP is 35.9% from the Agricultural sector on average.
  2. Mining: When it comes to energy, mining, oil extraction, and quarrying are the primary sources of Delaware. With the help of this whole industry, the state could contribute 19.2% to the annual GDP.
  3. Manufacturing: The manufacturing industry is another growing sector in Delaware. This industry gave 12.5% to the annual GDP of the state and is getting many greater aspects.

Delaware LLC Dissolution Review

Time needed: 5 minutes.

Here’s a recap of the steps you must follow when dissolving your Delaware LLC. Click on the steps in this list if you want to read the full detail.

  1. Follow Your Delaware 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.

  2. Close All Tax Accounts

    Make sure you close all your tax accounts to avoid incurring further costs.

  3. 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 Delaware

To dissolve an LLC in Delaware you need to file the Certificate of Cancellation with the Delaware Division of Corporations by mail, in-person or online and pay a filing fee of $200.

If you are wondering What is the Cost to Dissolve an INC in Delaware, you’ve come to the right place. Here are the steps to take. Before filing for dissolution, make sure you have paid any outstanding taxes. If not, you’ll need to make a list of all taxes you’ve paid and haven’t. Once you’ve compiled your list, contact the various government entities to clear any outstanding taxes. Remember, taxes are due in advance so don’t make it a surprise during dissolution.

Once you’ve gathered the necessary information, the next step is to file for dissolution. In order to disband an LLC in Delaware, you need to file Articles of Dissolution (also known as Certificate of Cancellation) and register with the state. In addition, you must pay state fees, which can total $149. However, you may opt to hire a professional service provider to do the filing for you, but be sure to consider the cost.

Once you have filed the required documents with the Secretary of State, the next step is to fill out the Certificate of Cancellation. This document must include the name and date of formation of the LLC, and it must be signed by an authorized signer. The entire process will take about two weeks, depending on the size of your company. If you’ve decided to dissolve your LLC, it may be best to use an attorney.

After you’ve decided to dissolve your LLC, you’ll need to pay the fees of dissolution. These fees vary depending on how much tax you owe, but they will typically be less than $200. You can file a Certificate of Cancellation online or by mail. Regardless of which option you choose, be sure to file a cover letter as well as pay any outstanding taxes. After the cancellation process is complete, others may use the name of your business.

Before filing for dissolution, you need to value your business and make sure that you get full value for everything you have. This includes any assets, goodwill, and tax information. You can estimate the value of your business by preparing all documents related to the business operations. You can perform a self-assessment or you can hire a professional to do the valuation for you. Make sure to gather all necessary records so you can be sure to use the appropriate valuation method.

In addition to the fees for LLC formation, Delaware businesses must pay a $300 alternative entity tax every year. For more information, visit the state’s website. It can be difficult to navigate the complicated state laws. But luckily, there’s help. The Division of Corporations offers free online courses to help you form an LLC in Delaware. Taking advantage of these classes will make the process much easier for you.

To dissolve your LLC, you’ll need to close all tax accounts and file a dissolution form with the Delaware Secretary of State. There’s also a dissolution meeting in which the owners of the LLC vote whether to dissolve. If the vote is in favor of dissolution, the dissolution process will go forward. The members will divide up all LLC assets, including the profits and capital, and distribute them among the shareholders and other stakeholders.

F.A.Qs

Is there any filing fee the LLC owner has to pay for dissolving their LLC?

Yes, in Delaware, there is a fee of $200 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Delaware SOS.

Is the revenue department clearance required for dissolution?

No, there is no requirement of revenue department clearance till the time the SOS of Delaware accepts the dissolution form.

Can someone else take the name I use for my LLC?

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.

Are there any financial penalties if I don’t dissolve my LLC legally and miss the reports?

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.

Is there any fees of the probate judge who is taking the dissolution decisions?

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.

In Conclusion

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 Delaware. If you have any query do let us know in the comment box. 

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