Limited Liability Companies don’t exist forever. And while there are many reasons why they may cease to do business, there is only one way to end an Indiana LLC correctly.
This brief guide will walk you through the significant steps you’ll need to go through when shuttering your LLC in Indiana. However, dissolving an Indiana LLC is a legal process. As such, any improper actions or an overlooked form can lead to financial or legal pitfalls. Therefore, it is best to contact a professional to help in these matters.
Quite simply, an LLC dissolution is when a limited liability company halts all operations and ceases to be a legal entity. Once dissolved, the business can no longer operate in the state of Indiana. Since the LLC ceases to exist, the members of the business are no longer required to file annual reports, pay taxes, or maintain licenses for the business.
There are three different types of LLC dissolution in Indiana. An LLC may cease to exist due to administrative, judicial, and voluntary dissolution. Administrative and judicial dissolution are involuntary and not controlled by the members, while voluntary dissolution is. Understanding the difference between the three is crucial for how you proceed in dissolving your business.
Here is a brief overview of three ways and reasons an LLC can be dissolved in Indiana:
In an administrative dissolution, the state of Indiana comes in and dissolves an LLC. This is usually due to a violation committed by the LLC or one of its members as laid out under IN Code § 23-0.5-6-1 (2023). These violations include:
In Indiana, circuit or superior courts can dissolve an LLC when they find the behavior of the LLC to warrant such a punishment. Often called a corporate death penalty. The strict guidelines that the courts must adhere to ordering a judicial dissolution are provided in IN Code § 23-1-47-1 (2023). The reasons a court may order a judicial dissolution of any LLC for:
For an LLC with shareholders, there are additional reasons, including:
For an LLC with creditors, a judicial dissolution may be ordered if:
A voluntary dissolution occurs when an LLC, on its own, makes the decision to halt all business activities. Depending on the LLC’s operating agreement and how many members (registered owners) there are, a voluntary dissolution may require a vote.
Indiana is unique because it has separate rules for voluntarily dissolving an LLC, depending on when it was formed. Any LLC formed on or prior to June 30, 1999, needs to follow the IN Code § 23-18-9-1 (2023). An LLC formed after that date must follow IN Code § 23-18-9-1.1 (2023).
The steps below are only general guidelines, and it is advisable to consult an expert to ensure you are dissolving your business correctly based on the most up-to-date requirements and the specifics of your LLC.
Not all LLCs must vote before dissolving, but some do. In general, LLCs with multiple members will require a vote where the majority of the members agree to the dissolution. Single-member LLCs do not need to vote.
However, even multi-member LLCs may not require a vote based on the business’s operating agreement. Many operating agreements include pre-agreed upon dissolution triggers, and if any of them are activated, a vote is not necessary.
Many LLCs write into their operating agreement when and how the LLC can be dissolved. If your LLC’s operating agreement includes language on what actions should take place in regard to voting, paying debts, closing business activities, splitting the LLC’s assets among members, etc., these must be followed.
Multi-member LLCs must follow their operating agreements when voting on voluntary dissolution.
Making the formal decision to voluntarily dissolve your LLC is just the first step before it ceases to exist as a business entity. After voting, there are other business matters which must be addressed. These can include:
Although personal assets are most likely protected by an LLC, creditors can go after assets owned by the business. It is a good idea to contact any creditors to settle any remaining debt. Speaking with a tax expert at this stage can help protect you from legal and financial issues in the future.
In Indiana, you don’t need to obtain a tax clearance certificate before dissolving your business, but you must send a copy of the articles of dissolution to the Department of Revenue and the Department of Workforce Development at:
Indiana Department of Revenue
Enforcement
Division/Dissolutions/MS-104
100 N. Senate Ave. Rm. N241
Indianapolis, IN 46204
Indiana Department of Workforce Development
Employer Audit Section
10 N. Senate Ave.
Indianapolis, IN 46204
Your current bookkeeper or a tax expert should be able to inform you if you owe any local, state, or federal taxes that you need to settle. You should also file Form 966 to notify the IRS that you are ending your business.
Businesses should also close their INTIME tax accounts by sending an Indiana Business Tax Closure Request (Form BC-100) to the Indiana Department of Revenue to avoid new estimated tax bills:
Indiana Department of Revenue
Customer Service
P.O. Box 6197
Indianapolis, IN 46206-6197
Depending on your business situation, you may also need to settle any upcoming employee taxes or outstanding pay.
To formally dissolve your Indiana LLC, you need to submit the completed articles of dissolution to the Secretary of State. You can submit it online through the INBiz portal or through the mail using Form 49465.
Filling out the form is easy. You will need to include:
If you are sending the form by mail, you will also need to include a $30 check made payable to the Indiana Secretary of State. Online submissions are only $20 and are handled through the INBiz portal.
Send the completed form to:
302 West Washington Street
Room E-018
Indianapolis, Indiana 46204
No matter why you decided to dissolve your Indiana LLC, it is natural to have mixed feelings after all your hard work. But, it is crucial to understand that you will move on and continue your entrepreneurial journey with more knowledge and experience than before. Whether it is through forming a new company or even revoking your dissolution and restarting your former LLC, the possibilities are endless.
Businesses have a natural lifespan, and sometimes, it makes sense to stop them. These are a few of the reasons why it could be a good move:
You will continue to be responsible for filing taxes and an annual report even if you are not generating any income. In addition, you may leave your business exposed to financial or legal issues.
There is a $30 fee to dissolve your LLC through the mail and a $20 fee if you do it through the INBiz portal.
Dissolving your Indiana LLC through the INBiz porta is quicker and cheaper than submitting the articles of dissolution through the mail.
If you submit the articles of dissolution online, the filing should go through within 24 hours. When mailing in the form, expect it to take between three and five business days.
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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