To dissolve a limited liability company one has to take up a set of required steps. In New York, 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 New York, 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 New York LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of New York 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 New York LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in New York
- After Dissolving Your LLC
- Reasons Behind Dissolving New York LLC
- New York LLC Dissolution Review
How to Dissolve an LLC in New York
Dissolution of New York LLC requires three broad procedural steps. Having a New York LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the New York Secretary of State.
Step 1: Follow Your New York 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 New York 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 New York 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 New York Articles of Organization, one has to file New York 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 New York 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 New York 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.
- Along with the Articles of Dissolution, LLCs have to fill up and submit the Certificate of Dissolution.
- After filling in every detail, one should submit the form through an official mail address and make a payment. You can also file by Fax. In case of Filing thorugh Fax number, make sure to attach the Credit Card/Debit Card Authorization Form.
- It takes 3-5 business days after filing of articles of dissolution if you are filing it by mail.
New York State Department of State DIVISION OF CORPORATIONS, STATE RECORDS AND UNIFORM COMMERCIAL CODE
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231-0001
Fax: (518) 474-1418
Filing Fee: $60
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 New York LLC
Apart from these three steps, no major dissolution rules are there in New York. 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 New York includes the formation as well as dissolution fees. To dissolve an LLC in New York, LLCs have to file an Article of Dissolution. The filing fee is $60. 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 New York 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 New York. A registered agent can help you do the needful.
Reasons Behind Dissolving New York LLC
LLC is a type of business entity that has less liability on the owners or the company’s partners. But when someone wants to start a new LLC, they need to go through the legal operations of the government. So, when you dissolve an LLC in New York, it can lead to legal problems for the owners if done inadequately. Even though legal issues can be a reason to dissolve the company, there are other reasons too.
The possible reasons why to dissolve a business in New York,
- The low inflow of cash in the business.
- The improper management of the basic tasks of the company.
- Disagreements among the partners of the company.
- Too many issues regarding the profits of LLC.
- Failure in achieving the ultimate goal of the company.
By now, it would have been easier to get an overview of the concept. Well, it is all about legal operations and their necessity. So it is better to dissolve the company in the same legal way, the way it commenced.
Top Businesses in New York!
When it comes to businesses and start-ups, New York is known as the hub of these events. So if you plan to start an LLC in New York, it is essential to understand the profitable business models. Here, we have mentioned them,
- Professional Services: The New York state is known for its professional services sector as it has generated jobs for 403,200 people. The gross earnings of this sector are around $211.36 billion, making it the second-largest contributor after the finance sector.
- Export services: New York is known to export various goods, commodities, minerals, and many other things. The contribution of export business to the state’s GDP in the year 2018 is around $84.7 billion. This value accounted for 5.1% of the total GDP of the state.
- Agriculture: The economy of New York is getting many benefits because of the sectors of agriculture. The sector also supports many manufacturing businesses and has contributed more than $5.4 billion to New York’s GDP.
New York LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your New York LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your New York 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 New York
To dissolve an LLC in New York you need to file the Articles of Dissolution with the New York State Division of Corporations through mail by paying a filing fee of $60.
Regardless of whether you are looking to dissolve an LLC in New York or any other state, you need to follow a specific set of rules and procedures. These rules will vary from state to state. The cost of dissolving an LLC varies based on how much paperwork is filed, and how complex the case is.
If your LLC is a corporation, you will need to contact the New York State Department of Taxation & Finance to obtain a written consent to dissolve. You will then need to pay the necessary fees to dissolve your business. You can pay this fee by credit card or cash, or you can use a service provider to do it for you.
The New York state government will check to see if your business has any back taxes. They will also verify that your company is current with filing its taxes. If you are not, you may have to pay additional taxes on top of the dissolution fee. If you are already paying your taxes, you can avoid any potential issues during the dissolution process.
In addition to paying your taxes, you will need to file an Article of Dissolution to dissolve your LLC. The form is available on the New York Department of State’s website. You can file the form online or print out the PDF version and mail it in with a check or money order. The form will be processed within seven business days. You may also choose to pay a $25 expediting fee to have the document processed within 24 hours.
In addition to filing the article of dissolution, you will need to pay the corresponding fees to dissolve your LLC. These fees range from $60 to $200 depending on how complicated the case is. You will also need to pay for other fees related to dissolution, such as filing your certificate of payment taxes and setting up a settlement schedule.
If you choose to hire a professional service provider to file your Articles of Dissolution, the cost will vary based on the type of service you are paying for. You can also pay an expediting fee of $15 to $35 to have your documents processed in two hours or $150 to have your documents processed in a day. You will also need to provide credit card authorization and indicate which level of service you are requesting on the Credit Card/Debit Card Authorization Form.
Aside from filing the article of dissolution, you will also need to send legal notifications to your creditors, employees, and vendors. You will also need to wind up your LLC and distribute any remaining assets to its members. You will need to designate a winding up company manager to ensure the process goes smoothly.
You will also need to notify your federal tax agencies. If you are dissolving an LLC in New York, you will need to notify both your state and federal tax agencies. You may also need to notify your lenders if you have loans against your business.
Yes, in New York, there is a fee of $60 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the New York SOS.
No, there is no requirement of revenue department clearance till the time the SOS of New York accepts the dissolution form.
The name will also get deregistered with the dissolution of 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 New York. If you have any query do let us know in the comment box.