In the event that one decides to dissolve an LLC in the state of Minnesota, there are a couple of steps one must follow in order to properly close the business and also satisfactorily meet any obligations.
Navigating through legal obstructions as well as practical ones can certainly prove to be complex at times, but do not worry.
In this article, we will help you with the steps that you need to take to dissolve an LLC in Minnesota.
1. Review Your LLC’s Operating Agreement
Starting with the first step in the process, the first thing a person must do to begin dissolving their Minnesota LLC is review their operating agreement. A typical document includes information like how the LLC should be dissolved, the requirements for approval whether it be:
- Unanimous votes or majority member votes
- Steps for liquidation of assets
- How the remaining assets will be distributed amongst the LLC members
If your LLC lacks an operating agreement, the laws of Minnesota will govern how the dissolution process goes about. To mitigate the risk of skipping important requirements, ensuring that the state statutes about LLC dissolution are read, is a good practice.
2. Hold a Meeting and Vote to Dissolve
The next step in the process involves scheduling a formal LLC meeting regarding dissolution and blending voting for the dissolution in it too. You mustn’t forget to ensure that the meeting is scheduled in a manner that the members get notified about it and everything related to the voting one as well, is documented.
In the case of majority rule requiring unanimous consent after voting on the dissolution, provide all the members with the appropriate documentation.
Creating a documented record of the necessary steps to dissolve a business, makes it easier to deal with any legal requirements that may arise in the business.
3. Filing Articles of Dissolution
The formation of an LLC in Minnesota is made official by the dissolution submitted to the Secretary of State in the form of Articles of Dissolution. There are a few steps that should be kept in mind:
Complete the Form: Under this category, several documents can be downloaded including the Articles of Dissolution form. Some of the necessary documents include:
- Legal Name Required: The legal name of an LLC registered under Minnesota
- Identification Number: In Minnesota, every LLC is assigned a unique identification number
- Date: Write the effective date of dissolution that will go into quick effect.
Filing Fee Payment: After adding all the amendments, all the forms have to be submitted with a filing fee. Currently, that fee is $35 for mail filings and $55 for online and in-person ones. Before filing the forms, please visit the Secretary of State’s website for the latest fee updates.
Submitting the Form: There are several ways Articles of Dissolution can be filed, including:
- Over the Internet: The Minnesota Business Filings portal is quite useful in getting online filings done.
- By Mail: One can mail the articles to the address listed on the Minnesota Secretary of State’s website.
- In Person: Head over to the following office:
Minnesota Secretary of State
60 Empire Drive, Suite 100
St. Paul, MN 55103
As per the method of submission made, the processing times will differ, make sure to keep this in mind if you have a deadline.
4. Notify Creditors and Settle Debts
Once you’ve filed the Articles of Dissolution, the next step would be to inform all the stakeholders and creditors of the LLC dissolution considering Minnesota laws. According to Minnesota laws, all debts and obligations must be cleared before the dissolution proceeds. To notify charging farmers:
- Written notice that informs charging farmers of the claim submission to the LLC dissolution will be sent out to each creditor.
- With the submission of claims, a reasonable date must be prescribed marking the end date, this is usually set from anywhere between the 90th and 120th day.
- To reach unknown creditors, a dissolution advertisement can be published in local newspapers if the situation calls for it.
When sending claims, make use of these opportunities to check and resolve legal debts. The LLC must maintain thorough documentation of these interactions for liability purposes.
5. Distribution of LLC Assets
The next stage is the liquidation of the LLC’s assets. This activity consists of selling the business property and stock or assigning the ownership to the members. The proceeds of the liquidation should be utilized to:
- Settle all outstanding and other claims.
- Pay the last running costs which may include salaries and other remuneration costs, or leased premises costs.
Once all claims are settled, the remaining assets should then be allocated to members and shareholders of the LLC in proportion to what they own according to the operational agreement or in accordance with the Minnesota statutes.
6. Cancel Permits, Licenses, and Business Names
To complete the dissolution process, all the permits licenses, and fictitious business names associated with the LLC must be canceled. Some of the common cancellations are:
- Local business licenses and permits.
- Tax registrations with the state.
- Trade names or DBA names are registered at the state level.
If any of these items are not canceled, it means that the fees or penalties for not canceling remain in force despite the dissolution of the LLC in question communique.
7. Submit the last Tax Returns
Make sure you submit the LLC’s final tax returns if any including federal taxes, state taxes, and local tax returns. These include:
Federal Taxes: Label the tax return as ‘final return’ to inform the IRS of the LLC’s cessation of operations, then pay any federal taxes due to the LLC.
State Taxes: Furthermore, complete any necessary Minnesota Department of Revenue tax forms and settle unpaid state taxes.
Employment Taxes: If there were affiliated employees, submit relevant payroll tax returns and settle any payroll tax dues.
In addition, write to the IRS to cancel the LLC’s Employer Identification Number (EIN) account.
8. Retain Business Records
After an LLC has been dissolved, it is even more important to keep copies of important business records for several years. These records may include:
- Notes of dissolution and other documents filed with the Minnesota Secretary of State.
- Last returns and evidence of taxes paid.
- Statements of financial results and documents of the property turnover
- Reports and agreements on restructuring meetings and other documents for the dissolution.
These documents can come in handy in case of audits, lawsuits, and other problems that can occur after the closure of the LLC.
How EasyFiling Can Help
Dissolution of an LLC might be very confusing and takes ample time, in moments when the legal and administrative requirements are not well understood by you. EasyFiling has qualified professionals to assist you with every step of dissolving your Minnesota LLC including:
- Filing with the proper authorities the Articles of Dissolution were executed accurately and timeously.
- Advising on writing to the creditors and clearing the outstanding balances.
- Appropriately canceling all tax accounts, licenses, and permits.
- Advising on how to allocate assets, as well as on keeping necessary business documentation.
With EasyFiling, you can avoid the hassle and confusion related to further steps after LLC dissolution enabling a Smooth and faster process in easy filing.
Book a free consultation today to dissolve an LLC in Minnesota.
Frequently Asked Questions (FAQs)
In Minnesota, how long does it take to dissolve an LLC?
The length of time it takes to process Articles of Dissolution varies by the method of submission. Submissions completed on the Internet will broaden the waiting scope more than those done via mail or personally. Visit the official website of the Secretary of State for more details and updates.
What if I do not go about correctly dissolving my LLC?
Doing so may result in liabilities to taxes, possible penalties, and legal ramifications. The LLC will also still be liable for any obligations or debts incurred after it has stopped operating if proper dissolution is not done.
Is it possible to reinstate my LLC after I dissolve it?
Minnesota permits the reinstatement of dissolved LLCs in certain circumstances. The process for doing so is applying for reinstatement through designated forms and the applicable fee. For details, contact the Secretary of State of Minnesota.
Nabin Adhikari
