Sometimes, it is necessary to dissolve a limited liability company (LLC) or other business entity. LLC members can decide to dissolve the company once it has served its purpose, at the conclusion of a bankruptcy proceeding, or for various other reasons. An LLC operating agreement might require dissolution upon certain events, such as the death of a member. LLC dissolution may also occur by order of state officials or a court of law. To dissolve your LLC in Missouri, you must follow the procedures established by your operating agreement, account for all business debts and taxes, and file several documents with the state. This article provides an overview of how to dissolve an LLC in Missouri.
Most LLC formations do not have built-in termination dates. This means that the LLC can exist forever unless its members or the government take action to dissolve it.
Dissolving an LLC terminates its existence as a separate legal entity. The members are no longer obligated to file paperwork or pay fees or taxes. At the same time, they cannot use the LLC to hold property, incur debt, or protect themselves from liability for business activities. The business name may also be available for others to use.
LLC dissolutions fall into three categories: judicial, administrative, and voluntary.
The formation of an LLC becomes official when you file paperwork with the Missouri Secretary of State. The Secretary of State has the authority to dissolve an LLC in some situations:
You may ask the Secretary of State to rescind the administrative dissolution and revive the LLC. This requires filing an Affidavit to Rescind Cancellation of a Limited Liability Company and an Application for Reinstatement, as well as payment of a fee.
Missouri circuit courts have the authority under state law to order the dissolution of an LLC for certain reasons, including:
The state may bring a lawsuit for judicial dissolution, also known in this type of case as involuntary dissolution, in the county where the LLC’s registered agent is located.
State law also allows LLC members to petition circuit courts for judicial dissolution. They may do this when “it is not reasonably practicable” for the members to continue running the LLC “in conformity with the operating agreement.”
Voluntary dissolution occurs when the members of an LLC decide to wind down and terminate the business. This may occur under the following circumstances:
The first scenario requires the dissolution of the LLC, so it is not entirely “voluntary” on the part of the members. Unlike administrative dissolution, however, the members are responsible for filing the paperwork dissolving the LLC. The other scenarios better fit the definition of “voluntary” since they involve affirmative decisions by the members.
This section will focus on voluntary dissolution based on a decision by the members. The following steps are necessary to ensure that you wrap up the LLC’s business activities and settle its debts.
The members must follow the procedures outlined in the operating agreement for deciding to wind down the business and dissolve the LLC. If an LLC does not have an operating agreement, or if its operating agreement does not address dissolution, state law dictates when voluntary dissolution may occur.
As far as state law is concerned, the procedure for approving the dissolution of an LLC is the same whether the company has one member or many members. The difference is practical. A single-member LLC does not need to hold a vote of its members. It is still important to document major decisions even if you are the only member. This is especially true when the decision involves ending the company.
The dissolution clause in your LLC operating agreement governs the process you must follow to approve and carry out the dissolution. The operating agreement might require a simple majority vote to approve dissolution, a two-thirds majority, or something else. It could also contain instructions for how to notify members and when to hold the meeting to discuss and vote on dissolution.
Once the members have approved the dissolution, you may need to handle matters like canceling contracts, paying off debts, and dividing assets among the members. The operating agreement should include provisions for how to handle these matters.
The operating agreement controls the procedure for voting to dissolve an LLC in Missouri in almost every situation. The one exception is when all the members consent to dissolution in writing. No matter what an LLC’s operating agreement says about voting on dissolution, unanimous written consent is sufficient.
As discussed in Step 5 below, LLC dissolution requires you to file two documents with the Missouri Secretary of State. You must file the first document when you make the official decision to dissolve the LLC. The second document comes at the end of the process.
Before you can dissolve your LLC, you must wind up all aspects of your operations. This includes:
You must notify the LLC’s creditors and claimants about the dissolution. If your business has any debts, such as credit card debt or loans, you must pay these off before finalizing the dissolution. If you do not resolve a debt before dissolving the LLC, you and the other members could face personal liability for that debt.
You may need to file final tax returns for the LLC. Unlike many states, Missouri does not require you to obtain a tax clearance letter showing that all state taxes are paid in full. You might want to request one anyway, just in case you need to demonstrate that the LLC has paid all of its tax obligations in full.
As soon as possible after the members vote or agree to dissolve the LLC, you must file a Notice of Winding Up with the Secretary of State. This document must include:
The filing fee for this form is $25. You may e-file through the Secretary of State’s online portal, or you can submit a paper form to the Corporations Division, P.O. Box 778 / 600 W. Main St., Rm. 322, Jefferson City, MO 65102.
You must file Articles of Termination with the Secretary of State once you have completed the winding-up process. This document must include the following information:
The filing fee and filing instructions are the same for the Articles of Termination as the Notice of Winding Up.
Once the Secretary of State’s office receives and files the Articles of Termination, it will issue a Certificate of Termination to you. This document officially establishes that the LLC no longer exists.
The dissolution of your LLC does not necessarily mean that you have completed the process of closing the business. You could still face claims from creditors and others who believe they have a claim against the LLC. They have three years to file a claim from the date the Secretary of State publishes the contact information that you provided in the Notice of Winding Up.
Business owners dissolve LLCs for a wide variety of reasons. Aside from administrative or judicial dissolutions, the following are only a few possible reasons why members might decide to dissolve an LLC:
The filing fees for the two documents you must file to dissolve an LLC total $50. The cost of winding up a business can vary widely.
Yes. The Missouri Secretary of State maintains an online portal.
The length of the process depends on how long it takes to wind up the business. Once you have completed that process, you only have to wait for the Secretary of State to issue your Certificate of Termination.
If the Articles of Organization do not specify a termination date for the LLC, it could exist indefinitely. You are responsible for filing tax forms and maintaining a registered agent even if the LLC is not actively in business. This costs you money, and the LLC could face administrative dissolution if you fall behind on your obligations.
You must follow each state’s procedures for notifying them of the LLC 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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