How to Dissolve an LLC in Hawaii

In Hawaii, the process of dissolving an LLC is rather complex as it requires legal and administrative provisions in place. Whether due to personal matters, external changes in the market, or a new business venture, one must take the necessary steps to avoid the imposition of state laws. The legal termination of your LLC’s operations is known as dissolution and eliminates the risk of any additional liabilities, fees, or taxes in the future.

This guide outlines a breakdown of the procedure to allow users to access the information more easily by splitting it between the initial steps and the final filings. Completing all these steps diminishes the chances of failure to legally dissolve an LLC in Hawaii.

If the aforementioned procedure feels difficult, there’s a solution. EasyFiling provides a team of experts who simplify the steps in the filing process and allow smoother compliance, saving time. For further information on how we assist in dissolving an LLC in Hawaii, you can read below.

1. Review Your LLC Operating Agreement

Hold on! Go through your LLC’s operating agreement first before starting the dissolution process. It often contains the following essential elements:

• How to go about the dissolution
• The necessary votes that will be required
• Asset distribution

If no operating agreement exists, follow the guidelines outlined in Hawaii’s LLC statutes. Understanding these diligence procedures helps avoid future disagreements among the members as well as rule violations with the state.

2. Hold a Member Meeting

All LLC members should be invited to a meeting where the decision, approval, and discussion of the dissolution are made. This stage is significant; otherwise, the other members who are not participating in the dissolution stand in the dark, so to speak, and are not in agreement with the action to disband the LLC.

Decisions made during the meeting should be documented in the minutes, including the date the resolution was made and the vote results. This information is important in a variety of processes and may even be required when you are applying to dissolve the LLC.

In such a meeting, consider discussing:

• Dissolution reasons
• Expected completion of the process
• Any issues brought up by members

3. Settle Outstanding Obligations

All remaining outstanding liabilities should be paid off before the dissolution documents are filed. Properly winding up the LLC’s business can demonstrate goodwill and ensure that there are no other legal or financial issues in the future.

Pay Debts: Settle any dues to creditors, including loans, bills, and other bills owing to third-party vendors or service providers. Other particulars include service contracts.

Notify Creditors: You may send these letters to creditors advising them of the dissolution and inviting them to make an application with a specified date for making claims. You can dispatch this notification through mail or through a local newspaper as stipulated by state law.

File your final taxes: Send in the last state and Federal tax returns for yourself. Write ‘Final’ across the tax returns advising tax collectors on the closure of the primary business. Any outstanding tax owed should have been paid to ensure no possible occurrence of any fines or such issues after that.

Once you have done that, make sure that you also settle employee salaries and bonuses alongside severance payments if applicable. If you’ve withheld sales tax or any other taxes, send those to the right people first.

4. File Articles of Termination

To dissolve your Hawaii Limited Liability Company, you must submit these Hawaii Limited Liability Company Articles of Termination to the Department of Commerce and Consumer Affairs. Do the following:

a. Fill out the form

You will need to obtain the Article of Termination form as noted above from the Hawaii DCCA Website, where you will be required to give such details as follows:

• The name of the LLC
• The effective date of dissolution;
• A statement to the effect that affairs of the LLC have been disposed of and closed;
• Signatures of a member or manager or other authorized persons.

Ensure you have filled in the details correctly and that they correspond with your LLC Registration documents.

b. Fill out Applications

Forms can be sent via mail, dropped off in person, or put online:

Online: A more secure and quicker approach is to use Hawaii’s Business Registration Division portal.

Mail:
Send to form to:
Business Registration Division
P.O. Box 40
Honolulu, HI 96810

In Person:
If you want to submit in person, go to the DCCA office:
335 Merchant Street, Room 201
Honolulu, HI 96813

c. Filing Fee

Filing an Articles of Termination comes with a 25-dollar fee in addition to that further fee might be charged for expedited processing. It is always best to keep a copy of the receipt for record.

5. Notify Relevant Parties

Let all parties concerned regarding the dissolution of the LLC know. First of all, it should include:

Employees: Termination dates and final documents like last paychecks or benefits accounts.

Vendors, and Suppliers: Re-occurring contacts and old subscriptions should be deleted.

Customers: If there were advance payments or deposits delay in informing them about the closure should be avoided along with the clearing of any reimbursements to them.

Banks and Financial Institutions: After all transactions have been finished, take care of all business bank accounts of the LLC and credit lines.

This undoing of the LLC has raised the possibility of any unsettled matters remaining when the LLC is taken offline.

6. Cancel Business Licenses and Permits

Moreover, all business licenses, permits, or registrations issued by local and state authorities regarding your LLC should lapse. Contact the relevant agencies to verify how to cancel these licenses and whether there are any additional fees or terms to comply with. Not canceling these licenses can place an unnecessary burden of extra fees on the LLC in terms of renewals.

7. Distribute Remaining Assets

In the case that there are any remaining assets available after/while paying off the debts of the LLC, they can be split off to the members as per the ownership percentage defined in the operating agreement. The following forms of payments can be made under this process:

• Cash distributions
• Transfer of property or equipment
• Partnership with other intellectual assets

All distributions made should be kept documented to avoid any conflict of interest amongst the members.

8. Retain Records

You should retain duplicates of all dissolution documents, tax records, and correspondence for at minimum five years so that in the case of legal investigations or audits the relevant material can be produced. Some of the important records that are relevant are:

• Articles of Termination
• Final tax returns
• Debt evidence
• Records of distributions

Not only will arranging these records protect you from any future legal culmination but they will also provide clarity in case any issues arise.

How EasyFiling Can Help

EasyFiling eases the issues related to the withdrawal of an LLC in Hawaii. Some of our services are:

Filing Assistance: we prepare and file Articles of Termination on your behalf.

Compliance Review: our competent team of professionals makes sure your LLC fulfills all legislative requirements before being disbanded.

Notifying Creditors: We help clients with notifying their creditors and resolving their claims.

Filing State and Federal Taxes: EasyFiling makes it easy to file a state or federal tax return for the last time after dissolution.

Choosing EasyFiling allows for a stress-free dissolution process. To commence, visit our website or contact our team for support.

Book a free consultation today to dissolve an LLC in Hawaii.

Frequently Asked Questions (FAQs)

How long does it take to dissolve an LLC in Hawaii?

The Articles of Termination are processed in Hawaii in 5 to 7 business days. Expedited services are available for this procedure if you are in a hurry.

What happens if I do not dissolve my LLC properly?

If an LLC is not properly dissolved, the members are still liable for taxes, fees, and penalties owed to the state. Additionally, legal issues may arise in the long term.

Can I reopen my LLC after dissolving it?

The answer is no; a formally dissolved LLC cannot be reopened. You would have to establish a new LLC to re-launch your business.

Do I need to file federal tax forms to dissolve my LLC?

Yes, if I am closing an LLC, I will need to file a final federal tax return and mark it as such. Make sure no federal taxes are due before heading forward with dissolution.

What is the price of dissolving an LLC in the State of Hawaii?

To dissolve an LLC in Hawaii, you will have to file Articles of Termination, and the fee for doing so is $25. Other costs will include debt settlements, permit cancellations, and fast filing service costs.