To dissolve a limited liability company one has to take up a set of required steps. In Massachusetts, 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 Massachusetts, 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 Massachusetts LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Massachusetts 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 Massachusetts LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Massachusetts
- After Dissolving Your LLC
- Reasons Behind Dissolving Massachusetts LLC
- Massachusetts LLC Dissolution Review
How to Dissolve an LLC in Massachusetts
Dissolution of Massachusetts LLC requires three broad procedural steps. Having a Massachusetts LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Massachusetts Secretary of State.
Step 1: Follow Your Massachusetts 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 Massachusetts 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, 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 Massachusetts 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 Massachusetts Certificate of Formation, one has to file Massachusetts 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 Massachusetts 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 Massachusetts 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.
Mail to (OR in-person drop)
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Rm. 1717
Boston, MA 02108
Online FIling: Massachusetts Online LLC Dissolution
Fax: (617) 624-3891 (a fax voucher coversheet has to be included)
Filing Fee: $100
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 Massachusetts LLC
Apart from these three steps, no major dissolution rules are there in Massachusetts. 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 Massachusetts includes the formation as well as dissolution fees. To dissolve an LLC in Massachusetts, LLCs have to file an Article of Dissolution. The filing fee is $100. 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 Massachusetts 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 Massachusetts. A registered agent can help you do the needful.
Reasons Behind Dissolving Massachusetts LLC
It is not possible to keep a business going if it is continuously letting the company down. But it is impossible just to shut down the doors of the company. There is a need to dissolve an LLC in Massachusetts properly with documents. With the help of proper dissolution, there will be no outstanding liability on the company’s shoulders. Here are some other reasons why the company needs dissolution,
- The company directors don’t have time or will to continue with the business.
- The owners don’t have enough money for the creditors.
- One of the owners died due to an accident or disease.
- The initial aim of the company has changed to another one now.
- The period of the company’s deed has come to an end.
- There is no regularity in the payments of the taxes.
Top businesses in Massachusetts!
There are plenty of things that we get to see in the state of Massachusetts. It is all about the economy and how it is growing. If someone is having a business or wishes to start an LLC in Massachusetts, they should have a plan. With a proper plan, it is possible to make a better company and get profits from it. People always fear that they will have to shut the company down. But if they have accurate figures, it won’t be necessary! Here are some top businesses of Massachusetts,
- Finance and real estate industry: The best a state can get is a better economy and development. With the help of this specific industry, it is possible for them very effortlessly. It is making the most out of all industries and contributes $109.73 billion to the GDP too.
- Professional business services: There is no scarcity in the innovation of new business ideas. And that is also a reason why Massachusetts is thriving in this aspect. The industry contributes $101.2 billion to GDP and gives a chance to get more development.
- Healthcare and social assistance: People are doing a lot better in this industry, and it is also the sector that provides the most employment. With this, there is a contribution of $58.93 billion to the economy and a better chance at earning.
- Information technology: It is an excellent way of bringing the world together, and Massachusetts is doing great in this department. It makes a representation of $35.54 billion and gets it higher every year.
Massachusetts LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Massachusetts LLC. Click on the steps in this list if you want to read the full detail.
- Follow Massachusetts 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 Massachusetts
To dissolve an LLC, you must file a certificate of cancellation with the Secretary of State’s office in Massachusetts. The certificate of cancellation is easy to file online, or you can fax it or hand-deliver it to the Department of Revenue. In Massachusetts, you will have to pay a $10 expediting fee if you send your document in an envelope. It will take from 1-2 business days to process.
A dissolution in Massachusetts costs $100, and you’ll need to pay an additional $9 expedited processing fee if you file by fax. There’s no Department of Revenue clearance required, but you must be current on your annual reports and fees before you can file for dissolution. A Certificate of Cancellation will be accepted by the Secretary of the Commonwealth for filing. If your LLC has been active for at least two years, you can file the certificate of cancellation yourself.
An LLC can be dissolved for as little as $100. This is the same for domestic and foreign businesses in Massachusetts. For domestic companies, the cost is $300. For foreign LLCs, you must pay a $500 filing fee if you’re not current on annual reports. To file your certificate of cancellation, you’ll need to provide your certificate of cancellation and tax compliance certificate from the state in which the company was formed.
Yes, in Massachusetts, there is a fee of $100 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Massachusetts SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Massachusetts 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.