Dissolving your Ohio LLC can be necessary for many reasons including, closing your business, merging, or restructuring.
In this article, we will help you with the steps that you need to take to dissolve an LLC in Ohio.
1. Review Your LLC Operating Agreement
The first step that needs to be done for the dissolution of Ohio LLC involves critically analyzing the first document which outlines procedures for dissolution, The Operating Agreement. This document usually consists of;
- Voting process
- Distribution of assets
- Required member approvals
However, if your Operating agreement does not guide you to specific steps, then Ohio law can be implemented. Recognizing the details of your agreement will ensure that compliance and unnecessary conflicts will not arise.
2. Vote to Dissolve the LLC
According to Ohio law, the termination of the LLC must be agreed upon by all its members. A meeting needs to be conducted and the decision to dissolve needs to be recorded. The resolution should cover the following;
- Signatures of all members
- The decision made to dissolve
- The date on which the meeting was held
Formal resolution is critical in divorce cases as it ensures both parties are on the same page while also providing legal documentation for any future disputes.
3. File a Certificate of Dissolution
Ohio requires one to submit a Certificate of Dissolution, which is a prerequisite to deregistering any registered business in the state. Here is the procedure:
Steps to File:
Download the Form: Register with the Secretary of State as a business entity and propose LLCs for reasons designated.
Complete the form: After obtaining Form 562 as well as the suggested documentation, you will be required to show evidence of:
- Your LLC name
- Business registered Number
- Reasons for business deregistration
- Date of registration transition This section will remain optional.
Submit the Form: You can submit the completed form online, by mail, or in person:
- Online: Through the Ohio Business Gateway. This is often the quickest method.
- Mail: Send to Ohio Secretary of State, P.O. Box 670, Columbus, OH 43216.
- In-person: Deliver to the Secretary of State’s office at 22 North Fourth Street, Columbus, OH 43215.
Fee: The filing fee for the Certificate of Dissolution is $100. Ensure you include payment with your submission to avoid delays.
4. Notify Creditors and Settle Debts
According to Ohio law, LLCs are required to inform creditors and resolve any existing debts before they can be dissolved. You can do this by taking the following steps:
Send Written Notices: Explain that your LLC has been dissolved so that the creditors can come up with claims by a particular date. This measure acts as a shield from being liable for subsequently finding out about any potential claims.
Settle Debts: Utilize any of the assets owned by the LLC to repay any debts such as loans, invoices from suppliers, or even staff salaries.
Settle Remaining Claims: If any claims are contested, be sure to settle them as early as possible. If you want to be efficient when winding down a company, negotiating settlements is a good option.
Any assets left after settlement should be divided among the members of the LLC as per the terms defined in the operating agreement or according to which members are located in Ohio law. These are generally allocated by each member’s ownership stake in the company.
5. Cancel Licenses, Permits, and Registrations
To clear of paying additional charges or facing penalties, revoke any business licenses, permits, or registrations obtained in the name of the LLC. Reach out to the agencies in your locality and state to carry out this process. Such as:
- Licenses for professionals.
- Permits issued by health agencies.
- Tax registration permits.
Not canceling these items may lead to paying renewal fees that are unnecessary or perhaps receiving compliance notices.
6. File the Final Tax Returns
Ensure all state and federal tax returns are filed before finalizing the LLC. Here is how it can be done:
State Taxes: Make sure that all applicable state tax forms have been filed, including the Ohio Commercial Activity Tax’s final CAT return. To avoid any fines make sure that all taxes are fully paid.
Federal Taxes: Mark the IRS tax return as final and send along Form 966 which is for Corporate Dissolution / Liquidation, if applicable. You may also be required to file Schedule K-1s for members based on the business structure.
During this operation, it is advisable to consult a tax expert who will assist you in addressing more complex issues.
7. Shut Down LLC’s Banking Accounts
After paying off all debts, it is necessary to close the LLC’s remaining accounts. Checking and savings accounts and credit lines as well. Make sure to make any remaining payments, from payroll to vendors, before closing out the respective accounts.
Let your bank know that the business is dissolving, and ask them to provide you with a letter to that effect for your records.
8. Complete IRS and Other Agencies Notifications
Inform all IRS departments about your LLC’s ceasing activity due to which the final tax returns were filed. This would prevent needless notices from being sent to you in the future. Furthermore, inform:
- Taxation in the State of Ohio.
- Tax authorities of the location.
If there are no longer business needs for the Employer Identification Number (EIN), write to the Internal Revenue Service (IRS) for cancellation of the EIN.
9. Maintain Crucial Documents
Ensure to retain copies of all the documents for the dissolution, returns, and records for at least 5 years. These documents may be needed for:
- Audits
- Disputes with debtors
- Proof of fulfillment of regulations.
Organized information is helpful for audits after dissolution to avoid spending more resources on legal or tax issues.
How EasyFiling Can Help You Dissolve an LLC in Ohio
While the process to dissolve an Ohio domestic limited liability company can be cumbersome, EasyFiling allows you to do this accurately while ensuring adherence to state laws. Here is how we can assist:
Help by Experts: EasyFiling assists every entrepreneur based in Ohio in understanding the process of filing the Certificate of Dissolution, the legal obligations involved, and managing the financial activities of your LLC during the separation.
Filing Assistance: If you have the Certificate of Dissolution ready, we may assist you in submitting it to the state of Ohio. We try to minimize the risk of loss or delays through the proper filling of any required forms.
Notifying Creditors: We help you draft the appropriate letters to be sent to debtors and any other required parties to comply with the relevant laws, thus avoiding any obligations later on.
Tax Compliance: EasyFiling can help you file your final returns for the IRS as well as for the Ohio Department of Taxation so that all tax requirements are fulfilled.
There is no major stress that you should face when you are dissolving your LLC in Ohio. Thanks to EasyFiling’s professional support, you can round up the activity ensuring it’s done right without all the legal hoops and hurdles. We will take care of the documents while you focus on your business or other important personal things.
Book a free consultation today to dissolve an LLC in Ohio.
Questions and Answers (FAQ)
1. What is the cost to dissolve an LLC in Ohio?
The fee for filing the Certificate of Dissolution in the state of Ohio is $100. This amount is to be enclosed with the dissolution form. However, online submission if opted may help in shortening the time duration but this does not help in lowering the payment.
2. Can I dissolve my LLC in Ohio if I have outstanding debts or liabilities?
Yes, you can go on and dissolve your LLC even if you are in debt but all financial obligations must be fulfilled. One of the requirements of the Ohio law is to notify your creditors, and all debts must be paid or settled before filing for a dissolution. Failing to satisfy these obligations may leave you exposed to future claims.
3. Am I required to submit a final tax return before shutting down an LLC in Oh?
Yes, every business that is seeking dissolution in Ohio must submit a tax return to the IRS and Ohio Department of Taxation. This entails finalizing any taxes owed. If applicable, the final return should also be marked as “final.” More forms could be required, in addition to the standard IRS forms based on the type of your LLC, such as if Form 966, corporate dissolution, or liquidation is needed.
4. What is the status of my LLC if I do not submit a Certificate of Dissolution?
If you don’t file the Certificate of Dissolution your LLC will be viewed as still functional by the state of Ohio’s records which may result in you paying unnecessary annual fees and taxes. The LLC can also become susceptible to legal and financial obligations in the future if a notice for dissolution is not submitted.
Nabin Adhikari
