To dissolve a limited liability company one has to take up a set of required steps. In Utah, 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 Utah, 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 Utah LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Utah 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 Utah LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Utah
- After Dissolving Your LLC
- Reasons Behind Dissolving Utah LLC
- Utah LLC Dissolution Review
How to Dissolve an LLC in Utah
Dissolution of Utah LLC requires three broad procedural steps. Having a Utah LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Utah Secretary of State.
Step 1: Follow Your Utah 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 Utah registered agent will guide you with everything you need to close your limited liability company. When 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 Utah 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 Utah Certificate of Organization, one has to file Utah 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 Utah 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 Utah 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.
Utah Division of Corporations & Commercial Code
PO Box 146705
Salt Lake City, Utah 84114-6705
Filing Fee: Free
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 Utah LLC
Apart from these three steps, no major dissolution rules are there in Utah. 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 Utah includes the formation as well as dissolution fees. To dissolve an LLC in Utah, LLCs have to file an Article of Dissolution. No filing fee is needed in Utah. 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 Utah 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 Utah. A registered agent can help you do the needful.
Reasons Behind Dissolving Utah LLC
Many responsibilities come with a business. Many people give the business their all, but still, some reasons don’t let it grow. That is why there are a lot of people who dissolve an LLC in Utah too. The decision of dissolution can be two-way; it can either be voluntary or involuntary. Let’s go through both of these reasons,
- If the company is not paying taxes, it will be mandatory to dissolve.
- If the government finds out that the company uses its assets unwisely, it will be vital to dissolve it.
- If the company is inactive but not dissolved, there will be an involuntary dissolution by the government.
- If the business owners don’t wish to keep the company active anymore.
- If the directors have no more money to keep investing in the company.
- The frequent lawsuits by the clients against the company.
- The low inflow of cash in the company.
Top Businesses in Utah!
In terms of the economy, Utah is doing great. With the help of all the different sectors of the economy, the state can make good earnings for the GDP. All industries provide funds in the GDP, and if you start an LLC in Utah, it will be an excellent way for profits. But for that, it is important to know about all the top industries. Here, check them out!
- Professional and business services: It is the top and leading service provider of the state. People want the best for themselves, and they can get it from these professionals. The professional services are indeed earning a lot, but they are funding the economy too. The amount turned out to be $20.01 billion.
- Manufacturing: The computer and electronic products are the ones that are on the top list of Utah in manufacturing. Other products, too, such as aluminum, copper, communication equipment, etc., are also important. The state needs help with the economy, and this sector is also one of the leading ones there. It makes a contribution of $19.93 billion to the economy too.
- Retail trade: The trade shops like automobile dealerships, discount stores, restaurants, grocery stores are the ones that make money for the state. It issues funding to the GDP with the amount of $12.63 billion that promotes growth. We need this industry as it is the one that the market is based on.
Utah LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Utah LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Utah 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 Utah
To dissolve an LLC in Utah you need to file the Statement of Dissolution with the Utah Division of Corporations & Commercial Code through mail. There is no filing fee charged in Utah.
Whether you are planning to dissolve an LLC in Utah or you are currently dissolving your LLC, you will need to pay a filing fee to the state. The Division of Corporations and Commercial Code processes the dissolution paperwork and you can submit your documents online, in person, or by mail. You can also choose to have your filing expedited. The process usually takes five to seven business days. If you choose to have your documents expedited, the fee will be $75. You will also have to submit additional paperwork, such as an Operating Agreement, to the state.
Before you begin dissolving your LLC, you must notify all creditors. You may also want to close any bank accounts your LLC has. You also need to pay any delinquent taxes on your business. There are several other tasks to complete before dissolving your LLC. You may want to consider hiring a professional to help you complete the dissolution process. This will ensure that you are legally compliant with Utah state law.
The process of dissolving an LLC in Utah will involve a number of steps, including paying taxes, closing tax accounts, distributing assets, and more. The process of dissolving an LLC in the state can be difficult, but it is not impossible. In fact, many LLC owners find the process relatively simple. You may want to consult a professional accountant to make sure you are complying with Utah state tax laws.
You will have to prepare a detailed list of all taxes paid during your business’ lifetime. You may also need to file a final tax return with the IRS. If you are a foreign LLC, you will also have to file an Application for Tax Clearance with the Tax Commission.
You will also need to prepare a list of your liabilities. This includes everything you owe to creditors, including fines and taxes. You may want to hire a CPA to assist you with the process. You can also have your taxes cleared in advance, preventing any issues during the dissolution process. You may be able to pay these liabilities by using credit cards or other means.
You will also need to prepare governing documents, including your Articles of Organization. These documents contain crucial information about your LLC, such as its official business name and date of dissolution. You can find these documents on the Division of Corporations and Commercial Code website. The website also has a search engine for business names.
You can also file an Application for Reinstatement if you want to reinstate your LLC. This document costs $54 and can be filed online or by mail. It is also possible to file an expedited dissolution form. The process will take 48 hours instead of five to seven business days.
The Statement of Dissolution, which can be filed online or by mail, is another important document that you will need to prepare. This form includes a printed name, Utah business entity number, date of dissolution, and signature. The Utah Division of Corporations and Commercial Code accepts the Statement of Dissolution, so you will not have to pay a filing fee.
There is no fee in Utah to dissolve a 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 Utah 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 Utah. If you have any query do let us know in the comment box.