The process of dissolving an LLC in Nebraska is simple, however, legal and financial obligations need to be met.
Be it a lack of profit or your business has served its goal, if you plan on closing your LLC then certain measures need to be followed to avoid penalties.
This article will help you break down the procedures to dissolve an LLC in Nebraska.
1. Hold a Vote to Approve the Dissolution
Dissolution of an LLC cannot be done without the votes of its members, and as such, a member vote needs to take place before the dissolution can take place. According to the laws of Nebraska, an LLC is required to dissolve if 75% of its members approve of the dissolution unless an operating agreement states otherwise.
Key Points To Consider:
Operating Agreement: Consider your operating agreement (handbooks) is provided to the members detailing how the dissolution which is required for a daisy chain to connect rather than a straight line is impossible.
Default Rule: In situations where your LLC does not possess an operational contract or the contract has lax clauses regarding the disestablishment of the organization then Nebraska’s default clause automatically comes into effect which usually requires majority consent from the members.
2. Submit the Articles of Dissolution
After serving your notice of dissolution and voting in favor of its conclusion, the next step is to ensure that the LLC’s existence is legally bound to come to an end by submitting the Articles of Dissolution to the Secretary of State Nebraska. This document acts as a formal notice to the state in which your LLC is engaged, therefore letting it know about the conclusion of its operations.
Filing Details:
Where to File: Articles of Dissolution may be filed electronically through the official website of the Secretary of State Nebraska or delineated contracts.
Required Information: In summary, when filling out the form, you will need to furnish the following information:
- The full legal name of the LLC
- The date which is intended to be used as dissolution date if other than the date of filing Articles of Incorporation
- An affirmation that all debts obligations and liabilities have been satisfied
Filing Fee: The fee for the document may vary so please consult the Secretary of State for the most recent information.
Processing Time:
Once you have submitted the required documents such as Articles of Dissolution, the state will take the liberty to process documents. The processing time may vary from filing method to filing method where online submissions typically take the shortest time.
3. Settle Debts and Financial Obligations
The last step which is also a prerequisite step for the dissolution of your LLC is addressing the obligations, debts, or any liabilities the company had prior. This would include paying off the creditors, ending the contracts that were made, and any legal claims that were there.
Actionable Steps:
Reach out to Vendors: Contact the vendors, suppliers, or even creditors about the LLC dissolution, this helps in submitting the last invoices or claims if any
Pay off any remaining debts: Based on Nebraska laws pay the debts during the liquidation process. For instance, with an appropriate hierarchy, start paying the secured creditors followed by the unsecured creditors.
Close Commercial Accounts: End off any business accounts or active credit accounts.
Distribution of Remaining Assets:
If there are still assets present after the debts are paid off, they will be divided by the officials of the LLC based on the terms that the business had. However, if there were no contracts or agreements made regarding the division, the paid-off percentage will determine the division.
4. Cancel Business Licenses, Permits, and Registrations
After the dissolution of any registrations, permits, or state if the governor has already been delegating licenses attached to the LLC, you cannot breach these new conditions.
Examples of Items to Cancel:
- Local business licenses issued by your city or county.
- State-specific registrations, such as sales tax permits or professional licenses.
- EIN accounts should be canceled if they are not relevant or no longer needed.
How to cancel:
- Make sure all the state tax accounts are closed by getting in touch with the Nebraska Department of Revenue.
- Inform the Internal Revenue Service (IRS) to deactivate the EIN associated with your LLC.
Otherwise, failure to cancel these items may result in fines, fees, or other complications in the future.
5. File Final Tax Returns
Filing of tax is crucial to any LLC that is set to be dissolved and so again informs the IRS and even the Nebraska Department of Revenue concerning the tax liabilities that the company entails.
Tax Obligations:
Federal Taxes: IRS Form 1065 or Form 1120 will serve as the final federal income tax return based on how your LLC taxes you.
State Taxes: Your last state income tax return will be filed in Nebraska. In cases where the company collected sales tax or had employees, final payroll tax returns and sales tax returns would be filed.
Local Taxes: Also inquire about local taxes like property tax, business tax or the like that may be imposed but were not mentioned before. Taxes should be considered alongside the deadlines that are imposed. Failure to do so may result in garnishment.
6. Distribute Remaining Assets
Once all liabilities and duties have been fulfilled, the remaining holdings of the LLC must be divided among the members.
Process for Distribution:
- Distribute according to the terms of the operating agreement, if any.
- If an agreement doesn’t exist, then distribute according to ownership percentages, as set out by Nebraska laws.
- Keep records of all distributions, such as receipts or transfer records, so that there are no disagreements later.
7. Notify Employees (If Applicable)
In case your LLC employs individuals, you need to strive to do this properly and within legal frameworks in terms of employment laws.
Guides to Notify Employees:
- Provide written notice of the business closure.
- Final payment processed including any unpaid wages and benefits earned.
- Release W-2 for the given tax year.
8. File Records of the Dissolution
Lastly, you must keep documents relevant to the dissolution process for several years. These documents may include:
- Filed Articles of Dissolution.
- Minutes of meetings or resolutions that sanctioned the dissolution.
- Final tax returns and receipts.
- Letters to creditors, staff, and state agencies.
Keeping these documents helps protect you in case auditors or a court has queries regarding the business model or even during legal battles.
How EasyFiling Can Help
EasyFiling is an expert in the dissolution process and is available to assist you throughout the process, regardless of how intricate it may be. Here’s how we can help:
Filing the Articles of Dissolution
With our EasyFiling service, you can rest assured that your Articles of Dissolution will be submitted on time to the Nebraska Secretary of State.
Settling the Debts and the Obligations
Our team can help you settle any outstanding obligations by contacting key stakeholders and managing their payments.
Canceling Licenses and Registrations
Our team can help you cancel business licenses, permits, or any registration necessary with the proper authorities.
Filing Final Tax Returns
We ensure that all outstanding tax obligations and registration with the Nebraska Revenue Department are completed in compliance with regulations.
So you do not have to concern yourself with administrative procedures and legal matters, reach out to us today to begin the dissolution procedure.
Book a free consultation today to dissolve an LLC in Nebraska.
Frequently Asked Questions (FAQs)
1. How Long Would It Take Me To Dissolve My Estate In LLC Form?
During the running of the dissolution process, along with submitting the Articles of Dissolution, the applicant can consider the timeframe of a couple of days to weeks during which the state of Nebraska can endorse the provisions.
2. What are the fees associated with dissolving an LLC in Nebraska?
There is a filing fee that is charged for the submitting of the Articles of Dissolution. This amount may differ from the one published, thus it’s better to contact the Nebraska Secretary of State or consult Easyfiling to get the most up-to-date fee structure.
3. What other things should I be prepared to deal with if I fail to dissolve my LLC properly?
Not dissolving your LLC properly results in the continued accumulation of tax liabilities along with fines and fees. Unpaid debts or obligations can also affect your private credit standing.
4. Will I be in trouble if I don’t place some notices to my creditors before the dissolution of my LLC?
Yes, you have to place some notices to the creditors along with the dissolution of all unpaid members so that any future legal or financial problems do not arise.
Nabin Adhikari
