Idaho has certain specifications when it comes to Dissolving a Limited Liability Company. If one is looking to find out how to go about it, one should make sure the LLC is being dissolved legally and legally.
If you want to change the structure of your LLC, or you want to put an end to your business forever. You need to see how the dissolution process works. This assures you that you will not be liable for future business ventures and your business shutdown is ideally managed.
In this article, we will help you with the steps that you need to take to dissolve an LLC in Idaho.
1. Check your LLC Operating Agreement
An operating agreement describes the exact processes required to dissolve an LLC, including whether a vote is needed, how long the dissolution will take, and how assets will be distributed. So that will be the first step, if there is one, you’ll need to do while closing the company.
For instance, search for clauses governing:
Member Voting: It is common practice in LLCs to require a majority vote for dissolution.
Notice Periods: Often, members will have to be informed of a proposed dissolution before the amalgamation.
Asset Distribution: Following the payment of creditors’ debts, the agreement should outline how the remaining assets will be shared.
If there is no operating agreement in place, adhere to the provisions of Idaho’s basic LLC statutes.
2. Hold a Vote to Dissolve the LLC
Perform an operating agreement review, and then LLC members’ votes on the proposed dissolution should proceed. A vote is required by Idaho law unless otherwise stated in the agreement.
Capture the voting process by taking minutes or written consent with the following:
- Date of the election including voting time
- Names and signatures of all the members who participated in voting
- The aggregate outcome of the voting
In the case of an LLC that does not have an operating agreement, there is a usual thumb rule that a majority vote shall suffice. However, if there are any unforeseeable events, it is best to ask a legal practitioner for appropriate paperwork.
3. Submit the Articles of Dissolution
Once, all the members have agreed to the dissolution of the LLC, the next stage is to file a notice in writing with the Idaho Secretary of State. The Articles of Dissolution is essentially the formal notice to be submitted when an LLC is dissolving its business operations in Idaho.
How to submit the Articles of Dissolution:
How to Obtain the Form: Visit the Idaho Secretary of State’s website and look for the Articles of Dissolution form or if you wish to apply through mail, then contact for a paper form.
How to Fill out the Form: Some of the details required in the form include the name of the LLC, the date starting from which it is effective, and a declaration stating that it has done away with all of its obligations. You might also be required to declare if there are any admin procedures concerning the dissolution of the LLC.
File and Pay the Fee: Articles of Dissolution may be filed with the state using mail or an online form. The filing fee, if submitted online, is usually around $20; paper submissions usually cost around $30. Depending on the state, the fees may be different, so don’t forget to check the Secretary of State’s website. Confirmation will be provided immediately after you have sent in the filing request.
The filing of the Articles of Dissolution is a legal way of informing the state of Texas that your LLC has been formally closed. Make sure to keep a copy of the filed Articles for your records.
4. Inform the Creditors and Pay Off the Debts
When you are in the process of dissolving the company, it’s important to do all of this above. Hand in hand with the dissolution is the responsibility of all debts, you will have to pay all debts of the LLC.
It should be done in written form and all the creditors should be informed that the LLC is about to be dissolved and details about the claim submission should also be provided. Not notifying claimants may expose members of the LLC to personal liability if claims arise after the dissolution.
Key steps include:
Sending Notices: This is easy to do but is of the utmost importance, the members must send instructions to their known creditors giving them the date of dissolution and how the claims may be filed.
Eliminate Outstanding Liabilities: Settle debts such as business loans, pay off suppliers, and settle employee wages. Where there are mere defaults, whether or not members caused them, and the funds are still short, settlement or liquidation has to be negotiated to ensure such debts are satisfied.
5. Revoke Legal and Other Authorizations for Doing Business
Dissolving the LLC requires first revoking any state or local business licenses or permits issued to the LLC or registered in its name. You risk incurring further penalties or fees if you do not revoke these permissions. This is even more necessary in the case of LLCs engaged in activities for which a license is needed.
How to cancel licenses:
All State Permits: Idaho State Tax Commission is contacted for business license cancelation as well as for tax account closures.
Any Local License: Local business permits including health, signage, and other operational requirements are obtained through city and county authorities.
6. Submit Last Tax Returns
Submit returns to the IRS as well as Idaho, everything that is due to be filed as final tax returns of the LLC. You could be penalized further or be saddled with more liabilities in the future if you fail to comply.
Federal Income Tax: It is the final income for all the members of the LLC. It is explained on the tax form as final if it is applicable for all the members of the LLC. Also, remember the LLC might incur federal payroll taxes or self-employment taxes.
Taxes for the state of Idaho: Any required state income tax or other forms regardless of sales and use taxes, unemployment insurance, or excises applicable to the state of Idaho must be filled together with the final return in the state. To end the tax affairs of your firm in Idaho, kindly reach out to the tax commission.
7. Remaining Properties Distribution
The assets remaining after settling all debts and obligations owed by the LLC can be shared among the members. The procedure of distribution should be done by the stipulated clauses in the operating agreement or the existing Idaho statutes governing the LLC.
The distribution process:
As per the operating agreement: In cases where the operating agreement allocates a particular manner in which the assets are to be distributed, follow that process.
In default of an Idaho operating law: Where there are no assets in the operating agreement they should be distributed according to the respective ownership of each member.
It is of paramount importance that the distribution of assets is done legally, and also that the respective owners are documented for purposes of future convenience about tax or legal issues.
8. Hold Documentation
After an LLC has been dissolved, it is best practice to keep all records for a period longer than seven years, especially in case any restorations require audits, tax-inappropriate questions, and or legal battles. Relevant documents to consider include:
Articles of Dissolution: This document is official evidence of the registration of changes to the state of the founding state.
Tax Returns: This includes copies of the Federal and state tax returns.
Operating Agreement: If applicable, this would serve as evidence of the internal affairs of the LLC and the procedures to be followed during the liquidation of the company.
Financial Statements: These include final financial statements and documentation of distributions of assets.
How EasyFiling Can Help Dissolve an LLC in Idaho
An LLC can be quite hard to restore in terms of legal aspects and more, and EasyFiling is there to make the process easier. Here are some of the ways that the solution caters to making the process seamless:
Professional Assistance
If you need assistance with customization, EasyFiling has experts who assist in the dissolution of LLC, while ensuring compliance with Idaho’s laws.
Submission of Articles of Dissolution
All completion and submission of Articles of Dissolution to the Idaho Secretary of State are under our jurisdiction, making sure everything is submitted and done on time along with the filing.
Tax Returns and Other Approvals
We assist you in applying and submitting final tax returns with the Internal Revenue Service and Idaho State Tax Commission as well as help you wind up any business accounts.
Cancellation of Licenses and Permits
EasyFiling takes care of the cancellation of business licenses and permits to ensure no extra fees are encountered.
Record Keeping and Documentation
All relevant documents are archived, so you are at ease with the information regarding the dissolution.
With the aid of EasyFiling, the entire process of dissolving an Idaho LLC becomes a lot easier without any effort or waste of time.
Book a free consultation today to dissolve an LLC in Idaho.
Nabin Adhikari
