To legally and properly dissolve a business as a limited liability company in West Virginia, one needs to take the proper steps as there are several rules and regulations regarding the decision.
If you are closing the business for any reason either financial or simply a change of plans, then there are certain legal processes that you need to follow.
In this article, we will help you with the steps that you need to take to dissolve an LLC in West Virginia.
Step 1: Review Your Operating Agreement
Make sure to check and go through the decision of operating dissolution before proceeding in making a final decision. The LLC operating agreement typically contains the following:
- Requirements for Voter Roles Between Members
- Notice requirements for meetings regarding dissolution.
- Once the LLC has been dissolved, there will be a Distribution of Assets.
In case your LLC does not have an operating agreement, abide by the default regulations of West Virginia state laws. The operating agreement directs the LLC on how to get dissolved whilst minimizing any disputes between members of the company if there are any.
Step 2: Obtain Member Approval
Members approval is important in the case where someone wants to dissolve an LLC and that is the first step that should be taken. Most of the time this includes voting during formal meetings. This will be written in the minutes of the meeting and a clear effort will be made to ensure that everyone is on the same page with what has been written in the operating agreement or the law.
Important Considerations:
- If some members are disgruntled, then provide an answer to their questions and assist them in reaching a reasonable point in order to prevent legal issues.
- More so, keep a journal with all conversations and decisions in order to ensure that there is a proper record of the proceedings.
Step 3: File Articles of Termination
You will need to file Articles of Termination with the West Virginia Secretary of State after the members decide to dissolve the company. This filing serves as a formal notice to the state that your LLC is in the process of being closed.
Steps to File:
Filling Out the Articles of Termination: Fill in the necessary form which can be found on the West Virginia Secretary of State’s web page.
Fill In The Information Requested Include:
- The registered name of the LLC.
- The date when the members approved for the LLC to be disbanded.
- Certification/Evidence that the debts and obligations that have been held by the LLC have been cleared and settled.
- Certification/Evidence that the assets that were remaining have been allocated to the members.
Submit the form: All completed documents should be uploaded online, posted by mail, or physically taken to the authorities. The filing charge is likely to be around $25 according to present rates posted on the Secretary of State’s website.
Mailing Address: West Virginia Secretary of State Business Division 1900 Kanawha Blvd E, Building 1, Suite 157-K Charleston, WV 25305
Another thing you can do is get in touch with the Secretary of State’s Office for them to assist you on the time border that you can use to file the dissolution and for any other discrepancies that you may have.
Step 4: Settle Outstanding Debts and Obligations
Settling all debts and obligations is a prerequisite for dissolving a limited liability company. This involves:
- Paying employees and contractors.
- Paying all outstanding loans and debts against the business.
- Paying all taxes that might be owed to the federal, state, or local authorities.
Practical Tips:
- Prepare a list of all the creditors and the corresponding debtor amounts.
- Inform the creditor that the business intends to dissolve the LLC and give a reasonable time for any claims to be lodged.
- Keep all records of payments and settlements made in orthodox form.
Once all of the pending debts of an LLC have been cleared, members are free to divide up any remaining assets according to the members’ interests as set out in the operating agreement. If all debts are not cleared and there is a dissolution of the LLC, trouble along the legal line can arise and LLC members are liable for the debts.
Step 5: Cancel Business Licenses and Permits
It is suggested that your LLC’s licenses, permits, or registrations be canceled if it has any of those. This way, your LLC can avoid incurring future fees or penalties. Apart from this, the local, state, and federal agencies must be informed about the dissolution. Some of the licenses and permits to revoke are as follows:
- Business Licenses
- Health Permits
- Professional/Industry Licenses
Each of the agencies that have to be contacted may have procedures to cancel licenses and permits, so it is advisable to contact them directly.
Step 6: Notify Tax Authorities
You must inform the West Virginia State Tax Department and the Internal Revenue Service (IRS) about the dissolution of your LLC. This avoids complications within your business tax accounts.
Steps:
- File last east state taxes
- File the last US Taxes stating that this is the last one.
- Cancel EIN with the IRS via written request.
- Pay any overdue state and federal taxes, if they existed.
Notifying the tax authorities might cause complications so one should be aware of tax authorities in such circumstances.
Step 7: Notify Creditors and Other Stakeholders
Take a moment to inform your LLC’s creditors, vendors, and customers about the dissolution of the firm. This step is essential for ensuring that all financial obligations of the business are settled and that legal disagreements do not arise in the future. Formal written notices can be sent to the creditors, which include:
- Details of the LLC, specifically the name and address.
- Justification of dissolution if required.
- If there is a deadline for claims submit of claims.
You should also notify other stakeholders like the landlords, your suppliers, and business associates about the dissolution so that the remaining contracts or agreements can be terminated.
Step 8: Maintain Records
After completing the steps above, you should start maintaining all the business records for three to seven years. Barring contracts that require more time than three years to terminate, all records only need to be maintained for that period. This comprises of:
- Tax filings.
- Financial statements.
- Meeting minutes.
- Dissolution documents.
Keeping these records is essential in case of audits, legal inquiries, or future disputes. It also ensures that you have evidence of compliance with all legal requirements.
Additional Tips for a Smooth Dissolution Process
Seek Professional Help: Please do not attempt to conduct an LLC dissolution on your own if you are not 100% confident in any single part of the process. Legal or financial professionals are entirely accessible and can assist you according to your needs.
Be Transparent: It’s best to make sure that all communication with members, creditors, stakeholders, etc is written down, with proper explanations attached to them. This way, you lower the chances of there being any miscommunication.
Plan Ahead: Start the dissolution process early to allow sufficient time for completing all required steps. Rushing can lead to errors or missed obligations.
How EasyFiling Can Help
Instead of worrying about the various steps involved in dissolving your LLC, turn to EasyFiling and let it do the work. We provide the following services:
Simple Instructions: EasyFiling makes sure that you don’t miss out on any legal aspect related to the dissolution of your LLC in West Virginia and incur losses.
Preparing and Filling Out Documents: We ensure thoroughness in your filing by taking the responsibility of submitting your Articles of Termination to the West Virginia Secretary of State.
Tax Compliance Assistance: Our specialists assist you in informing the tax bodies, signing final taxes, and completing your EIN termination with the IRS.
Notifying Creditors: EasyFiling assists to prepare and deliver the necessary official notices to stakeholders and creditors.
Ongoing Support: Have questions or need additional help? Our customer support team is here to guide you every step of the way.
We at EasyFiling partner with you to reduce anxiety and avoid activities that waste your time during the dissolution of your LLC. Book a free consultation today to dissolve an LLC in West Virginia.
Nabin Adhikari
