Several formal procedures must be done while applying for the application to dissolve an LLC in Montana. These steps ensure that the company will be legally closed, tax obligations will be addressed and certain state guidelines will be adhered to.
You need to know how to conduct an LLC dissolution process correctly as such a decision might come to you when your business is no longer profitable or when you are retiring or for some other reasons as well. It is dire important to follow even the simplest of procedures as disregarding them might leave you with continuing bills or some fines.
This article will help you break down the procedures to dissolve an LLC in Montana.
1. Review Your LLC Operating Agreement
The Operating Agreement of the LLC must be identified to initiate the LLC dissolution process. This document was made when the LLC was created and is helpful when the business is being wound up, as it may contain steps that will assist in the process.
In the operating agreements, it is also common for there to be specifications relating to how members or managers are supposed to approve a business winding up, as well as what percentages of votes will be required.
In the absence of an operating agreement for the LLC, Montana dissolves according to its rules and regulations. In general, an LLC in Montana may be dissolved either at the request of the members or at an order of a court, but it is great to have a clear operating agreement as it makes the process more straightforward.
2. Hold a Vote to Approve Dissolution
Once you have confirmed that dissolution is the most optimal decision, it is pertinent to have all the members of the LLC vote to approve that amalgamation. This is a necessary procedure that is under Montana law that ensures that all parties involved with that business are in agreement for the amalgamation to take place.
Record Details Of That Meeting: A meeting should be convened whereby all the participants should be physically present or electronically represented if proxy is permitted. After discussing the voting motion of and subject to this motion, members will cast a ballot on the subject. The votes cast should be recorded in the minutes of the meeting.
Supermajority: For almost all limited liability companies (LLCs) approval for amalgamation requires majority votes. But, your operating agreement may impose a stricter standard, for instance, a two-thirds vote. If members cannot agree no requisite conditions for voluntary dissolution of an LLC are met.
Advise Stakeholders: Once the majority has made their decision regarding dissolution, it is even more essential to make other stakeholders like employees, clients, contractors, and customers aware of this decision and what it means for them. There needs to be some level of clear understanding to manage expectations and operations till complete shutdown.
3. File Articles of Dissolution with the Secretary of State
Once the LLC Members decide whether to dissolve the LLC business or not and decide to proceed, you are required to submit the Articles of Dissolution to the Secretary of State Montana. This document pertains to our LLC which intends to legally inform the state that we will no longer conduct any business operations.
Where to submit: You may file the Articles of Dissolution online via the Secretary of State’s site or mail because they are going to integrate this feature.
What information is required: It is going five to six necessary questions that you need to fill which includes
- LLC Name,
- LLC Identification Number,
- The members of the LLC and dissolution approval date.
- A statement that clearly defines the LLC has repaid all obligations and debt or is trying to repay them.
How much does it cost to file: As of 2025, the dissolution Articles will cost you $15. Ensure that you combine this fee with the form because it is non-refundable if you change your mind later in the process.
4. Settle Debts and Liabilities
Out-of-court settlements are the only solutions to legal claims, legal debt obligations, and of course final payments to employees. Before we can dissolve your business you need to ensure that everything has been finalized.
Notify Creditors: All creditors should be notified of the dissolution and steps should be provided on how to file claims against the LLC. Furthermore, Montana law sometimes obliges the publication of a notice in local newspapers in cases of dissolution of the LLC.
Distribute Assets: The remaining assets after the debts have been paid should be divided among the members of the LLC. The assets should firstly comply with instructions in the operating agreement of the LLC, and only secondarily with the state laws of Montana.
Employee Payments: We recommend that you settle unpaid wages and unpaid benefits to your employees after you close your LLC to mitigate any claims against you in the future. If your LLC has employees, make certain that all employee-associated issues such as payroll taxes are filed.
5. Tax Returns And Final Reports
You are required to submit to the Montana Department of Revenue, and the IRS, a final tax return from the LLC before winding it up. Failing to do so will invite penalties, or even worse, may make the LLC liable to continuous taxation.
Taxes on Corporations: If your LLC is classified as a partnership, complete Form 1065 and indicate it is the final return. On the other hand, if the LLC is a corporation then sound L form 1120 form instead.
Montana LLC Final Tax: For LLCs that operate in Montana, there is a tax on sales, income, and some other taxes. As a requirement of LLC taxes in Montana, file a state return that indicates that it is the last filing that the LLC will make. In addition, pay any amount payable in sales or employment taxes.
Montana Last Annual Report: The state of Montana requires all LLCs to submit reports every year. In the event of dissolution of an LLC, the last report which denotes the stopping of the functioning of the LLC will have to be filed.
6. Allocate the Assets Remaining Own
Once the liabilities are taken care of, the remaining assets must be shared among the LLC members. The distribution procedure must be by the provisions of the operating agreement. Otherwise, the law in Montana will determine how the assets will be shared.
How Assets Are Divided: In most cases, assets will be shared according to the percentages of ownership as contained in the operating agreement. Failure of the agreement to indicate the same will mean, state law will guide the division of assets with members being compensated in proportion to assets they contributed to the LLC.
7. Give up the Employer Identification Number (EIN)
Cancellation of EIN (Employer Identification Number) with the IRS should take place after the dissolution of the LLC that was issued for the business by the IRS. This action aids in ensuring that the IRS does not recognize the EID as connected to an existing business.
8. Cancel Business Licenses
If your LLC has obtained various permits or registrations, you must also cancel them. Be sure to cancel every permit or registration your LLC has, including, but not limited to local, state, and federal agencies.
State Business Licenses: You can contact Montana from the State Department of Revenue to cancel state business licenses that may be held.
Local Licenses: For LLCs that have obtained licenses in municipalities (city or county), ensure that the licenses are canceled.
Industry-Specific Permits: If the LLC has managed to obtain any industry-specific permits like health permits, liquor permits, etc, ensure that these are canceled.
9. Inform The IRS About The Liquidation
Helping the IRS confirm that your LLC is no longer active must be divorced for tax purposes. This can be accomplished by completing your last tax return and submitting it as your “final return”.
In this way, it makes it easier for the IRS to understand that the business activity of the LLC has been terminated and, hence, there is no further requirement for any additional business filings by the company.
Why Choose EasyFiling?
Professional Help: EasyFiling assists in the entire span of the LLC dissolution process with professional advice.
Time-Efficiency: We do all the necessary correspondence with the authorities involved in the process and file the necessary documents on your behalf, saving you time.
Regulatory Obligations: We guarantee that in the process of liquidating your LLC, all applicable laws in the United States are followed, including state-specific laws.
Pricing: We ensure our services will be within the estimated amount and are honest without any surprise fees.
EasyFiling guarantees that dissolving your LLC in Montana is simple. It is also simple and easy to avoid legal issues with EasyFiling by ensuring that, when your business is wrapped up, it is done properly.
Book a free consultation today to dissolve an LLC in Montana.
Nabin Adhikari
