When it comes to dissolving a Limited Liability Company (LLC) in Louisiana, legal procedures need to be followed so that the formation is terminated. Inappropriate dissolution of an LLC can result in further legal actions and tax payments that need to be settled even after the business has been dissolved.
This article will help you break down the procedures to dissolve an LLC in Louisiana.
Why Dissolving an LLC Properly is Important
A properly dissolved LLC will ensure that the owner can avoid unnecessary legal issues in the future, such as:
- Payment of unnecessary fees, taxes, and penalties.
- Legal action is taken against individual members or managers.
- Unable to pay outstanding debts. By following the standards set for business closure, you can liquidate a business efficiently and without pending problems.
Step 1: Review Your LLC Operating Agreement
Most LLCs have an operating agreement that stipulates how a business will be dissolved. This includes:
- The approvals or votes needed to discontinue the LLC.
- Any time-bound milestones that need to be achieved to dissolve the LLC.
- How the remaining assets will be divided among the members.
In the absence of an operating contract for your LLC, Louisiana State’s default statutes would apply. These statutes are regulated under the Louisiana Limited Liability Company Act.
Step 2: Get Member Consent
To begin the dissolution process of an LLC, the prior consent of all its members is necessary. Usually, this is achieved through a majority or unanimous decision, as stated within the operating agreement or the Articles of Organization. Keeping this decision in writing is a good practice for record-keeping.
Best Practices to Approve Members:
- Organize a formal setting within which matters of member dissolution can be talked about.
- Use the minutes of the meetings to document any decisions made, such as votes and their outcomes.
- Obtain the signatures of all members on a written document that states the resolution to dissolve the LLC.
Step 3: Submit Articles of Dissolution
The next process is to submit the Articles of Dissolution to the Louisiana Secretary of State. This latter action gives formal notice to the State about your intention to cease operations of the LLC.
Important Tips Regarding The Filing:
Form: Download the Articles of Dissolution from the Louisiana Secretary of State’s web page.
Required Information:
- Name of the LLC as per State registration.
- Dissolution date.
- Dissolution reasons.
- The names and signatures of managers or members who are authorized.
Filing Fees: Check the Secretary of State’s office to confirm the relevant fee as it is subject to change. The filing fees may also vary depending on the case.
Submission Methods: Please send the filled form in person or by post. It is also possible to file it electronically, which may prove to be the quickest and most efficient method.
Once the Articles of Dissolution have been certified, the state will legally recognize your LLC as dissolved.
Step 4: Settle Outstanding Debts and Obligations
All LLC financial obligations must be settled before dissolution such as:
Settling any debts: Try to contact the creditors to pay off outstanding debts. If you manage to acquire a payment receipt, that will ensure proof of settled debt.
Canceling contracts: Cancel service contracts or agreements with suppliers along with any lease contracts.
Payroll obligations: All employee wages along with benefits must be paid in total.
Asset Distribution:
After all outstanding debts are settled, share the remaining LLC assets with its members by the operating agreement or the prevailing laws of the state of Louisiana. Normally, assets are shared in proportion to the ownership percentage of each member.
Step 5: Cancel Registrations, Permits, and Licenses
You must cancel your business licenses, registration, and also any permits your LLC had with the appropriate agencies to prevent being charged renewals or other fees. Such as the:
- Sales tax permits.
- State and local business permits.
Verify with the relevant authorities for professional licenses and certificates specific to the industry. Make a written request for confirmation after contacting the authorities regarding the cancellation process.
Step 6: Notify the IRS and File Final Tax Returns
In step six, I would advise you to let the IRS know of the dissolution of the LLC and make sure to file for final taxes. Also, keep in mind that you need to keep the Louisiana Department of Revenue in the loop regarding your LLC dissolvement. The list of pointers to keep in consideration is as follows
- Always remember to file your federal taxes and in the return mark it as your final.
- Also, remember to file the taxes of Louisiana State with the Louisiana Department of Revenue.
- Always notify the IRS regarding the dissolution to cancel the EIN of your LLC.
Additional Considerations Regarding Taxes:
- Make sure to pay all the sales taxes, payroll taxes, and other state taxes that could have been incurred.
- Don’t throw away any tax papers as they will come in handy for you.
Step 7: Close Business Bank Accounts
The moment all fiscal activities are completed, close the bank accounts of your LLC. Doing this will make sure no one can withdraw money without your permission. Most of the time I would also argue that if some kind of documentation is required regarding the dissolution, let the bank know about the business closing. Make sure to not forget to do the following:
- Terminate all automatic payments from your LLC account.
- Terminate all business credit cards.
Step 8: Maintain The Records Of The Dissolution
There are various financial records, tax documents, and tax returns that need to be kept for each dissolution. In Louisiana where your LLC was formed, it will be necessary for you to keep the following documents after your LLC is null and void:
- Tax clearance certificates
- Articles of Dissolution
- Proof of asset distribution
Mistakes You Should Not Make
Bypassing Approval of All Members: Ensure that there are no disagreements among all members regarding the dissolution.
Not Considering Tax Liabilities: This could result in penalties for not filing tax returns.
Failing to Cancel Licenses and Permits: Not canceling business permits would create unnecessary expenses and compliance issues.
Additional Tips
Seek an Attorney or an Accountant: They are trained to provide suitable advice during constructive dissolutions for complicated financial or legal affairs.
Be Aware of Parochial Regulations: Some parishes or cities will have additional rules for the dissolution of LLCs in Louisiana. It’s best to check with local authorities.
How EasyFiling Can Help You Dissolve Your LLC in Louisiana
If there are unfamiliar terms and steps involving the legal and administrative processes, dissolving an LLC may seem burdensome. EasyFiling simplifies the process for you when dissolving an LLC in Louisiana. Here are the ways EasyFiling can help:
Dissolution Checklist: We simplify every step of the dissolution process by guiding clients through federal and state legislation requirements.
Document Drafting and Filing: EasyFiling acts on your behalf, meaning that you don’t have to worry about the Articles of Dissolution. You will no longer need to draft or submit the document. This will save you time.
Tax and Finacial Aid Assistance: Our team will help you manage your Taxes, close accounts, and manage asset distribution to address obligations.
Personalized Solutions: In case your LLC is facing issues like unfulfilled contracts or debts, we are here to provide expert recommendations to help solve those issues.
Effortless Steps: With EasyFiling, you can focus on your next projects while we take care of the technicalities involved in LLC dissolution.
Book a free consultation today, to dissolve an LLC in Louisiana and facilitate a perfect handoff of the business.
Frequently Asked Questions (FAQs)
How much time do I need to dissolve an LLC in Louisiana?
The duration for filing Articles on Dissolution heavily relies on the filling method used. Filling via any digital platform takes 1 to 3 days on business days while filling through mail takes longer.
Do I need to inform creditors before dissolving LLC?
Informing all creditors of the bonds owed is necessary to prevent disputes and guarantee smooth closure after dissolving the LLC.
And if I do not fill Biiling Articles on Dissolution?
Not filing the Articles of Dissolutions makes the LLC’s shutting down process much more complex. It also means the business remains registered within the state, preventing new projects from coming to life.
Am I able to restore my LLC after having it dissolved?
Under certain conditions, you can restore your LLC by filing the appropriate documents and paying the corresponding fees.
What Post-Dissolution Documents Should I retain?
As required by Louisiana, you should keep Articles of Dissolution, tax clearance certificates, final tax returns, and papers showing asset distribution for several years.
Nabin Adhikari
