Anyone who have started an LLC in New York and had to dissolve it, knows it can be a mixed bag of emotions, ranging from despair to exhilaration.
Whatever your reason for dissolving your LLC, positive or negative, you must take steps to ensure you dissolve it correctly and free yourself from future liabilities or legal complications.
In this post, you’ll learn how to dissolve an LLC in New York, enabling you to move on to new ventures.
Dissolution is when you officially dissolve your New York LLC by completing and submitting your articles of dissolution to the secretary of state.
The process involves several steps you must complete. Once concluded, the dissolution removes your LLC’s independent legal status, prevents further obligatory state and federal tax filings, and removes future legal or financial liabilities.
To ensure the New York Secretary of State approves your dissolution application, you must first confirm the reason for dissolution and then follow the procedures relative to the closure.
Dissolution has three categories: voluntary, administrative, and judicial. The dissolution procedure you will follow depends on which dissolution type applies to your LLC.
Voluntary dissolution means the LLC members (or the individual owner of a single LLC) choose to close their business.
For multi-member LLCs, this often requires a majority vote, or a percentage vote relative to the LLC’s operating agreement.
Voluntary dissolution usually happens for 2 reasons:
Administrative dissolution is enforced by the state when an LLC fails to comply with the New York LLC’s requirements and obligations, which can include:
Judicial dissolution (known as the corporate death penalty) is when a court orders your LLC dissolution.
Some reasons for judicial dissolution are:
The steps you must follow to dissolve your New York LLC depend on which type of dissolution applies to you.
However, whatever the reason, you must follow the process correctly to ensure your dissolution is approved.
The following steps (except one) apply to all dissolution types; the first step is only relative to voluntary dissolution.
LLC members must vote to dissolve their LLC; the majority of the vote depends on the LLC’s operating agreement terms.
Once members have voted in majority as per their operating agreement, they must record their decision in the LLC’s official minutes.
However, if the LLC doesn’t have an operating agreement, the state will implement the New York LLC Act, which includes recognizing an LLC’s members’ majority vote or written consent to close the business.
The key difference between single LLC and multi-member LLC dissolution is members of a multi-member must vote in majority favor to dissolve the business.
Your LLC operating agreement should include every rule and member’s responsibility for running and dissolving the LLC.
Before implementing LLC dissolution, always refer to your operating agreement to confirm your reasons for dissolution and comply with the internal terms and conditions.
Operating agreement rules often include:
New York LLCs no longer wanting to continue in business can apply for voluntary dissolution.
Implementing voluntary dissolution requires preparing certain documents and filings and gaining tax clearance from the relative authorities; other rules include:
We’ll look closer at those next:
In addition to paying any outstanding invoices and tax obligations, LLC members must take specific steps to wind up their LLC’s business affairs correctly.
These steps include:
To dissolve your New York LLC, you must meet its financial obligations by informing claimants and paying all outstanding debts owed.
Failure to notify your LLC’s creditors before closing your business can result in legal action, such as your accounts going to a collection agency.
Multi-member LLC owners must sell all remaining assets and divide any remaining capital (after paying all their bills) as per their LLC operating agreement.
Before dissolving your LLC, you must file and pay all outstanding income, sales, and employment taxes with the appropriate New York state and federal authorities.
New York state doesn’t require an LLC to apply for tax clearance before dissolution; however, its Department of Taxation and Finance does advise filing the below returns relative to your business:
Your last step in dissolving your New York LLC is completing and filing your articles of dissolution with the New York Secretary of State within 90 days after the winding up of your business.
You can download and file your Articles of Dissolution using the New York Department of State’s website and mail it (including the $60 statuary fee) to:
New York Department of State, Division of Corporations
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231
And that’s what you must do to dissolve your LLC in New York.
Complete each step in order and then send your articles of dissolution to the New York Department of State.
LLCs with internal disputes, vast debts, or multiple assets should consider speaking with a New York LLC dissolution lawyer.
I hope you found this post helpful, and I wish you the best going forward.
You might want to dissolve your LLC for several reasons, those include:
Not dissolving your LLC after winding down can cause legal disputes over unpaid bills or taxes.
It costs $60 to dissolve your LLC in New York. You can pay for expedited dissolution; fees range from $25 to $150.
No, to dissolve your New York LLC, you must complete and submit your articles of dissolution application by mail or in person with the New York Department of State.
Dissolution filings by mail or in person takes 120 days. Expedited filings take 7 days to process.
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.
Products
Resources
@2024 Copyright Tailor Brands