To dissolve a limited liability company one has to take up a set of required steps. In Hawaii, 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 Hawaii, 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 Hawaii LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Hawaii 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 Hawaii LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Hawaii
- After Dissolving Your LLC
- Reasons Behind Dissolving Hawaii LLC
- Hawaii LLC Dissolution Review
How to Dissolve an LLC in Hawaii
Dissolution of Hawaii LLC requires three broad procedural steps. Having a Hawaii LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Hawaii Secretary of State.
Step 1: Follow Your Hawaii 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 Hawaii 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.
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 Hawaii 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 Hawaii Articles of Organization, one has to file Hawaii 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 Hawaii 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 Hawaii 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.
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 Hawaii LLC
Apart from these three steps, no major dissolution rules are there in Hawaii. 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 Hawaii includes the formation as well as dissolution fees. To dissolve an LLC in Hawaii, 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 Hawaii 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 Hawaii. A registered agent can help you do the needful.
Reasons Behind Dissolving Hawaii LLC
A business is aimed at greater profits, but if by any chance it is incurring losses, it is bound to be dissolved. But, if someone needs to want to dissolve an LLC in Hawaii, they need to make better decisions about it. It is all about legal operations, so people are looking for all rules and regulations to do it. There can be so many reasons that can lead to dissolution. Want to know? Check them here!
- The owners want to be safe from lawsuits.
- The owners are concerned that they will be liable to pay tax amounts.
- The owners can disagree about something in the aspect of the business.
- If the cost of the business is not covered, they can look for dissolution at that time.
Top Business in Hawaii!
Businesses are the main way that the state can contribute better and be developed. These things ensure that a person gets better, and with better knowledge, they can earn a fortune. With the proper information about the industry or the sector, the person can quickly start an LLC in Hawaii. It won’t be just easy or effortless, but it will be so profitable for them too. So check the top sectors here!
- Tourism: One of the most significant sectors of Hawaii is tourism. The approximate amount of 21% goes to the economy, and the revenue is in billions. With the help of this sector, all can get better opportunities in jobs and economy-wise.
- Manufacturing: Over thousands of people work in this industry, which is also why it stands vital for the state. With the help of 2% in the Gross Domestic Product, it is providing growth and economy to the place. This sector is the one that was much stronger in the early times, but still is one of the top sectors. That is why there is no way this industry will fall into dust and will keep on giving profits.
- Agriculture: Hawaii has been the best-known place for tourism, but it is one of the sectors that impact the economy. It is providing a lot to the state and contributing to GDP too. The percentage that this sector represents is 1.2% in GDP, which is a reasonable amount too.
Hawaii LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Hawaii LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Hawaii 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 is that you are indeed no longer in business.
What is the Cost to Dissolve an LLC in Hawaii
To dissolve an LLC in Hawaii you need to file the Articles of Dissolution with the Hawaii Department of Commerce and Consumer Affairs by mail, fax, in person or online for $25.
If you are looking to dissolve your LLC in Hawaii, you should be aware of the fees and penalties. Not dissolving an LLC properly could leave you personally liable for the company’s debts and liabilities. Therefore, it is best to get this process done as soon as you are certain you are going to stop conducting business.
One of the first steps is to file your final return with the state and federal tax agencies. Depending on your business type, you might need to file other paperwork as well. The tax agency may also require you to close your business bank account and credit cards. This can prevent you from getting into financial trouble in the future. Moreover, you will need to cancel any business licenses and permits that are related to your LLC. Taking these steps will help you protect your finances and reputation.
Dissolving an LLC in Hawaii is relatively simple and requires little time. The process will require you to fill out a specific form and pay a filing fee. You can also choose to file a dissolution application online or by mail. Make sure you include a copy of your Tax Clearance Certificate from the Department of Taxation. Most LLCs in Hawaii are managed by the owners, also known as “Organizers.” There are two types of Hawaii LLCs: At-Will LLCs, and automatic closure date LLCs.
Another important factor to consider when preparing to dissolve an LLC in Hawaii is the total debt. It’s important to remember that the debt does not dissolve with the business; if you fail to pay it off, you may face legal problems. Additionally, a failure to pay your debts can lead to a lower credit rating and increased legal risks. Therefore, it is important to carefully calculate how much debt you have in order to avoid any legal complications.
Using a service to form an LLC in Hawaii can save you a lot of time and money. Not only is it simple and low-cost, but you can be sure your information is accurate. A top-rated service is Northwest Registered Agent, which charges just $39, plus state fees. When you are forming an LLC in Hawaii, it is also important to create a Limited Liability Company Operating Agreement, or LLCOA, which lays out the inner workings of your business. This document is similar to a pre-nuptial agreement and can protect the interests of both parties.
In order to dissolve an LLC, you need to file a notice with the state. The Business Registration Division, part of the Department of Commerce and Consumer Affairs, is the place where you need to file for this. This document is called Form LLC-11 Articles of Termination and can be filed by mail, fax, or in person. The filing fee for this document is $25.
Once you’ve filed the Articles of Organization, you can proceed to file the legal documents. You will need to have a registered agent, which can be a person or a registered service. To start filing your LLC, you can also use Hawaii Business Express, an online filing service. In order to complete the filing, you’ll need to create an account using your business name, an active email address, and a credit card.
Yes, in Hawaii, there is a fee of $25 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Hawaii SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Hawaii 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 Hawaii. If you have any query do let us know in the comment box.