The procedure for dissolving an LLC in Mississippi entails several phases that need to be completed for legal termination and to ensure that there will be no future liability.
Be it restructuring your business, retiring, or other reasons, you must observe the procedures for dissolution.
This post will provide you with useful information to dissolve an LLC in Mississippi.
Step 1: Examine the Operating Agreement of the LLC
Before commencing with the invalidation process, assess the operating agreement of your LLC. Your LLC may have an operating agreement that contains details concerning the mode of invalidation, such as:
- Approval requirements (e.g., a unanimous or majority vote of members).
- Steps to notify members and creditors.
- Distribution of remaining assets.
If your LLC lacks an operating agreement, then the steps that are mentioned in the Mississippi state laws have to be followed. Understanding the rules outlined in the agreement serves to ensure compliance with the legal requirements and avoid disputes among the members.
Step 2: Legally Obtain Approval From Members
In Mississippi, members of an LLC must consent to the decision to extend the business formally. This decision should be documented in writing, such as in minutes of the meetings or some resolution. Be sure to:
- Request for a meeting of the members of the LLC.
- Vote to advance the dissolution.
- Document the resolution in the company’s official minute book.
It is the source of phenomenal concern why these decisions have been omitted because the appropriate authorities may have to look at this documentation for legal and taxation compliance in the future.
Step 3: File Articles of Dissolution with the Mississippi Secretary of State.
For an LLC to be officially closed, an Articles of Dissolution must be filed with the Mississippi Secretary of State. Here’s the procedure:
Go to the Secretary of State of Mississippi Website: You need to visit the website and log in to your account for the LLC. In case you do not have one, you need to create an account.
Get the Articles of Dissolution Form: Fill in the required fields including:
- The name of the LLC is registered in the state.
- The date of cancellation of the LLC.
- A written statement that all members accept the cancellation of the LLC.
Payment of dissolution fees-$50: Since Articles of Dissolution are granted in the state of Mississippi, payment of $50 needs to be made as a credit card payment online.
On online filing, submit the form: After you have submitted the completion form, the secretary of the state’s office will approve your dissolution request and you will get an authorization confirming your approval.
You need to keep the documents for the filed Articles of Dissolution since they validate that your LLC is officially dissolved.
Step 4: Resolve Outstanding Obligations
Before completely dissolving the LLC, you need to address the financial and legal obligations.
Pay Off Debts: Make sure to pay off any invoices, loans, or lease agreements with creditors.
File Final Tax Returns: All dues, including state and federal taxes as well as sales and employment taxes, are required to be filed. But do keep in mind, that you have to put a mark on them that says “final”. And don’t forget, you also need to retrieve your Employer Identification Number (EIN).
Cancel Business Licenses and Permits for LLC: It’s crucial to inform local, state, or federal authorities about the cancellation of your LLC. This is a preventative measure against unnecessary fines for unused licenses.
Notify the Mississippi Department of Revenue: It’s important that your business shows as closed to the authorities and that all state taxes are fulfilled.
These steps will help ensure that there are no legal issues that affect your LLC in the future.
Step 5: Distributing Remaining Assets
Once you are finished with all debts and distributions of obligations, proceed to arrange the separation of assets that remain with the limited liability company members. The distribution of any assets should be done either as per the operating agreement of the LLC or with Mississippi state law to ensure every member gets a proportionate share.
Usually, the process involves the following:
- Selling off tangible or financial assets like equipment or bank accounts.
- Distributing money based on ownership ratios or instructions given in the operating agreement.
Always remember to document the whole process of distribution to ensure the prevention of future conflicts.
Step 6: Inform Stakeholders
All concerned personnel need to be informed regarding the dissolution of your LLC. This category includes, among others:
Employees: Pay any available benefits or final paychecks. Tell them their employment status and any other unemployment benefits applicable.
Vendors and Clients: They must be informed about the closing of the LLC and be given the requisite payment instructions such as last payments or termination of contracts.
Creditors: This applies to the clients’ leftover balances. Must be given written notice to close the accounts. Under Mississippi law, creditors have certain provisions to file claims against the LLC which need to be settled.
Telling them at the right time helps avoid the mentioned misunderstandings of future legal claims against your LLC.
Step 7: Record Keeping
Crucial documents, including but not limited to hard copy forms of filed articles of dissolution as well as tax records and returns, should always be kept after the closing of the LLC.
- Filed Articles of Dissolution.
- Tax records and final returns.
- Proof of debt settlements.
- Asset distribution records.
The law in Mississippi appears to have a record retention requirement. Generally speaking, it’s advisable to hold on to documentation for as long as seven years before reviewing the case for shredding.
Common Pitfalls to Avoid When Dissolving an LLC
Do Not Miss Contacting Some Stakeholders: It is very important that all employees, potential customers, and creditors be made aware of the company’s closure because this will help avoid unwarranted inconveniences and legal challenges.
No Resolution of Tax Obligations: This includes any failure to file tax returns at the end of any given business cycle or making payments for pending tax debts. Such neglect can lead to penalties and further liabilities.
Not Maintaining Records: This documentation is relevant, and it is important for legal compliance and protection under Mississippi law.
Do Not Rush: Ensure to take your time to do each step appropriately to minimize issues later.
How EasyFiling Can Assist
Dissolving an LLC in Mississippi is not as easy as it sounds, rather it is cumbersome, lengthy, and complicated. This is where EasyFiling comes in. With us, we make sure that every aspect of the dissolution procedure is taken care of within the confines of the law. This is how EasyFiling can help:
Help You Outline and Adhere to the Process: We explain to you all that is needed so that you remain on the right side of the law. We assist you with the dissolution aspects of Mississippi legal matters.
Document Preparation and Filing: To make the entire process less cumbersome for both parties, our professionals file your Articles of Dissolution with the Secretary of State of Mississippi.
Settling Tax Obligations: EasyFiling assists in the final tax filings and ensures that all federal and state taxes are handled appropriately.
Record Keeping: EasyFiling takes care of storing and organizing documents about the dissolution of the entity for future purposes.
EasyFiling allows you to pay little thought to the next things you have to do while we busy ourselves with the complexities associated with dissolving your LLC. Book a free consultation today to dissolve an LLC in Mississippi.
FAQs on the Dissolution of LLC in Mississippi
How long will it take to dissolve an LLC in Mississippi?
Depending on the speed of the completion of the requisite steps and the filing of the Articles of Dissolution, it can take from a couple of days to a few weeks.
Do I need to let the IRS know about the dissolution of my LLC?
Yes, you are required to file your last tax returns and shut your EIN account with the IRS. In your tax returns, make sure to indicate that your LLC is not operational anymore.
What are the consequences of not filing Articles of Dissolution?
Your LLC continues to remain active if the Articles of Dissolution are not filed with the appropriate authorities, which means that in this case, you may be liable for ongoing taxes, fees, and legal requirements.
Is it possible to revive my LLC after the process of dissolution?
It is not possible. Once the process of dissolution has been completed for your LLC, it cannot be undone. In this case, if you wish to resume business in Mississippi, it will require a new LLC to be registered.
To dissolve an LLC in Mississippi, what fee is applicable?
The Articles of Dissolution carry a filing fee of $50. If any debts need to be settled, final taxes to be filed, or other professional services required, will incur additional costs.
Nabin Adhikari
