Dissolving a Limited Liability Company (LLC) in Tennessee is a legal process that requires careful attention to detail.
Whether it is restructuring the business or deciding to close down due to other financial reasons, secure the right protocol to be exercised to avoid a legal mess down the line.
Now you would find this blog informative, as this discusses everything to dissolve an LLC in Tennessee.
Step 1: Vote to Dissolve the LLC
Before casting the vote it is important to inform every stakeholder regarding the decision that the LLC will be dissolved. Right from the members to the owners, the decision needs to be followed by a vote. A piece of advice, always check if your state’s laws have a preset structure discussed or not so that the vote is not rendered null and void.
If you have an operating agreement: Utilize the set measures outlined in the agreement to assemble for a vote for the dissolution.
If an Operating Agreement Isn’t Available: In the absence of an operating agreement, dissolution can be done once a majority of the members sign the agreement.
Every stakeholder must agree with the decision to dissolve the LLC and the date of such agreement must be documented to assure validity in the future.
Step 2: File the Articles of Dissolution
In the form of Articles of Dissolution, you notify the state of Tennessee that its LLC has been dissolved and, thus, must be submitted alongside the request to dissolve the LLC within the state.
How to File: You can file the Articles of Dissolution online, by mail, or in person.
Filing Fee: The Articles of Dissolution do have a filing fee of $20 but this might also remain subject to applicability, do check with the secretary of state.
Required Information:
- Name of the LLC
- Date of the dissolution
- Statement claiming the prior written approvals by members and managers of the firm
- Manager or member signature
The Secretary of State will process your dissolution request, and once approved, your LLC will be officially dissolved.
Step 3: Settle the LLC’s Debts and Liabilities
Make sure to settle all liabilities, debts, and obligations of the company before its dissolution. These include settling contracts, third-party liabilities, employees as well as outstanding creditors.
Inform Your Creditors: Send notifications informing your debtors of the LLC’s dissolution so they can prepare themselves to meet the remaining debts.
Handle Taxes: Make sure that your LLC logs and remits all taxes due. Federal, state, and local taxes are all encompassed in this. If any tax obligations are owed, the members may become personally liable for the same.
- Local and State Taxes: Ensure that you are compliant with the Tennessee Department of Revenue concerning your state taxes. Finally, a state tax return is going to be filed if it was previously filed.
- Federal Taxes: Also file with the IRS all of the tax returns including the employment tax returns, if any of the final tax returns are applicable.
Step 4: Distribute Remaining Assets
When all of the debts and liabilities of the LLC have been settled any assets that remain must be allocated to the members. This allocation is usually done as per the operating agreement that exists between the parties. In the absence of an operating agreement, the assets are shared as per the default rules of the law of Tennessee.
Distribute Assets: Among the various members, all assets will be shared after the debts have been settled.
Tax Consequences: Depending on the LLC structure, members may be required to include the asset distribution in their tax return as part of CRI.
Step 5: Close All Business Accounts of Your LLC
The subsequent step after resolving any outstanding legal and financial issues is to close any business accounts remaining.
Bank Accounts: If your LLC has opened any business bank account, make sure to close them.
Business Licenses and Permits: If your LLC has any state or local business permits, registrations, or licenses, make sure to cancel them.
Cancel Insurance: Check whether your LLC has any insurance policies and cancel them if there are any.
Step 6: Retaining Records
It is very important to note that after your LLC is dissolved, you need to carefully document the entire process for both your business and personal protection.
Keep All Documentation: Articles of Dissolution, minutes, resolutions, final tax returns, and any correspondence with creditors or state agencies should all be preserved.
Statute of Limitations: Any lawsuits or claims against the LLC within a certain timeframe ought to have a statute of limitation.
For some time after the dissolution (usually three to seven years depending on the document type and the state), you may still be required to retain specific documents.
How EasyFiling Can Help
EasyFiling is on hand to help locate your LLC in Tennessee easily and without stress, even if it sounds like a daunting task. Describing how easy it is to theme is not necessary.
Expert Guidance: EasyFiling’s specialists will direct you so you do not do anything wrong and so that you will know how to do the process step by step.
Submitting the Articles of Dissolution: Allow us to take care of the details. EasyFiling deals with all the submission paperwork, from submitting Articles of Dissolution to the potential governor’s Secretary of State in Tennessee. Instead of taking a gamble, with EasyFiling your time and energy are spared.
Clearing Debts and Obligations: If your LLC owes debts or owed taxes that require management, EasyFiling will link you to practicing professionals resolving business obligations and will recommend safe contacts during the dissolution process.
Business Account Closures: EasyFiling can assist in explaining such actions as closing business account operations, licenses, and other insurance policy follow-ups.
Document Storage: EasyFiling engages in the storage of various paperwork and ensures that whatever paperwork pertains to the dissolution process is kept securely during and after the process.
Thanks to EasyFiling, you can be sure that while dissolving the LLC you will be in safe hands. Leave all complexities to us and instead of sweating over the details, take care of other business issues.
Book a free consultation today to dissolve an LLC in Tennessee.
Conclusion
With careful preparation and actions, any individual needs to follow through with the steps to ensure that the legal and financial obligations are completed for dissolving an LLC in Tennessee. The outlined procedures would ensure that the individual is exonerated from personal liabilities and that the business has fully been disbanded in compliance with regulations.
For EasyFiling’s professional services, the process of dissolution makes the disbanding of the LLC simple and enhances accuracy during the process.
Frequently Asked Questions
How long does it take to dissolve an LLC in Tennessee?
When the articles of the dissolution are e-filed, the timeframe usually ranges from 7 to 10 business days, while the period could extend further, in the instance where they were mailed out.
Can I dissolve my LLC with outstanding debts?
This type of debt can be filed for dissolution, a better course of action would be bankruptcy if payments cannot be managed.
Do I need to file tax forms when dissolving my LLC?
The last state and federal filings for taxes need to be filed to close out the business which includes franchise and excise taxes.
What if I don’t dissolve my LLC properly?
You will be able to have ongoing liabilities, and be unable to close your accounts or cancel your contractual agreements should the rules and regulations of dissolution not be complied with.
Can EasyFiling handle my LLC dissolution?
All the regulations and procedures will be taken care of by EasyFiling, making them your best option to choose.
Nabin Adhikari
