Making the decision to dissolve your Limited Liability Company (LLC) can be challenging and bittersweet. Yet, when that time comes, you need to know that there are particular steps you must follow, including a wind-up process and essential filing.
To help ensure you meet all the necessary requirements for dissolving your Mississippi LLC, we provide the information you need in this post, including the various types of dissolution and the steps for doing so here in Mississippi.
LLC dissolution is more than just taking down a website, closing all email accounts, and moving on. It is the official act of dissolving your business in your registered state.
LLC dissolution is the final step in removing the legal status of your business, either voluntarily or involuntarily, with the Mississippi Secretary of State.
Before its finalization and acceptance, however, you will need to take several actions such as sending notice to all creditors and applicable government agencies (both federal and local), taking care of any existing debts, and attending to any taxes that may be outstanding.
All steps and dissolution procedures must be followed in order to dissolve the LLC and protect you from any future liabilities.
Dissolving your LLC can happen in three distinct ways: administrative, judicial, or voluntary dissolution. Each type has its own procedures, so knowing how they differ is imperative.
Administrative dissolution is initiated by the State and removes all rights, authority, and powers of the LLC due to a lack of compliance with its obligations.
Administrative dissolution can result from any of the following:
In a Judicial dissolution, a court, through a legal process, orders the dissolving of the limited liability company.
Examples of when and why a court may initiate a Judicial dissolution include:
For a voluntary dissolution to occur, members of the LLC must vote to cease doing business. Such an action usually requires majority consent.
There are two distinct ways that a voluntary dissolution can happen. These include:
To conduct a voluntary dissolution in Mississippi, you will need to take the following steps.
LLC members will need to come together to discuss and approve a dissolution decision.
This vote in favor of dissolution requires the consent of all its members or a lesser amount if provided for in the operating agreement (or its formation documents).
All votes and decisions will need to be recorded in the meeting minutes.
In some cases, an agreed to dissolution trigger (e.g., a member’s death) in the LLC operating agreement will initiate the voluntary dissolution instead of a majority vote.
Should there not be an agreement or a dissolution clause in place, all LLCs will need to follow the provisions set forth in the Mississippi Limited Liability Company Act.
The distinct difference between single-member and multi-member LLC dissolution is that multi-member LLCs will need to come together and obtain a majority vote in favor of business dissolution.
The LLC operating agreement is a comprehensive guide for how to run and, if necessary, dissolve the business.
Understanding the dissolution clause in the LLC’s operating agreement is crucial at this point in time. This type of clause will govern what you do next; that is, the process your business must follow to dissolve the business. It may include such rules and matters as:
LLC members will need to come together to discuss and approve a dissolution decision. In Mississippi, this vote in favor of dissolution requires either the consent of all members or a lesser amount if provided for in the operating agreement or its certificate of formation.
Once a dissolution decision is officially made, steps to wind up all business affairs and handle any other business matters must occur. This “winding up” often includes:
Essential steps in the dissolution process include the following:
Notify tax agencies and file your final tax returns. While Mississippi does not require a tax clearance certificate to approve dissolution, it is essential that you meet all tax obligations as this can help you avoid legal issues down the road.
To file Articles of Dissolution in Mississippi, navigate to the Business Services page of the Secretary of State’s website. Once here, you will need to create a corporate filing account or login in with the account you already have.
Next, Click on the “File Articles of Dissolution or Certificate of Withdrawal.” Input your business ID. (If you don’t have this on hand, you can do a search for it on the state business search portal.)
Enter the dissolution effective date, then click on the sign button to enter your name and address.
At this point, you can either continue filing online or print out the Certificate of Dissolution document to mail along with a check made out to the Mississippi Secretary of State.
Whether you file online or by mail, the dissolution filing fee will be $50.
If you file your dissolution documents online, The Mississippi Secretary of State’s office should process them within approximately 24 hours.
If you choose to mail your documents, it can take 2-3 days to process. You can also drop off your documents, but the process time will remain the same.
The state does not offer an expedited processing option.
Dissolving an LLC in Mississippi requires certain steps, particularly if it is a voluntary dissolution. Following these official steps is crucial to acceptance by the state and in limiting any future liabilities for members.
While no one likes to see the end of something they created, dissolving the LLC you formed can also be a new beginning for you in that you can now seek different opportunities for going forward.
Situations where you should consider dissolving your LLC include:
Experiencing financial challenges or undue market competition
Inability to keep up with the increasing costs of doing business
Ongoing disagreements or disputes among LLC members
To dissolve an LLC in Mississippi, the Secretary of State’s office requires a $50 filing fee.
In Mississippi, you can complete the entire LLC dissolution online, starting with creating a corporate filing account on the Secretary of State website.
Generally, it will take approximately 24 hours to process the dissolution of your LLC in Mississippi if you file completely online. If you choose to print out the documents and submit via mail or in person, it will take 2-4 days.
Avoiding the process of dissolution in Mississippi means that your company continues to be expected to file annual reports, pay taxes, and conduct all other business activities as usual. It also means that members remain vulnerable to liabilities and claims against the LLC.
Also, if you do not take official steps to dissolve your Mississippi LLC and fail to file the required annual reports, the State can and will initiate Administrative Dissolution.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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