Dissolving a Limited Liability Company (LLC) in Kansas involves specific legal and administrative steps to ensure the process is carried out correctly and that all obligations are fulfilled.
Whether you’re closing your business for financial reasons, personal circumstances, or a strategic pivot, following the proper procedures is essential to avoid future liabilities.
This article will help you break down the procedures to dissolve an LLC in Kansas.
1. Review Your LLC Operating Agreement
LLCs usually have an operating agreement that contains key information regarding the business’s structure, ownership, and management. Before getting into the process of dissolution, it is crucial to check if an operating agreement is in place.
Most likely this document would have all the processes needed for the business dissolution such as approvals from members, the need for a vote, or other requirements.
2. Obtain Member Approval
The LLC Operating Agreement Kansas requires that the business entity be dissolved by unanimous consent of its members if the signed agreement does not make any provisions to the contrary. This decision must also be made in writing for appreciation and record purposes.
A formal meeting to vote on the dissolution may facilitate the process by ensuring that all members are adequately informed of what is to take place.
3. Submit Articles of Dissolution
To complete the process of dissolving the LLC in Kansas, the Articles of Dissolution must be submitted to the Secretary of State. This is the last stage of the Kansas LLC dissolution process as it signals to the government that your business has shut down permanently. This process consists of several steps:
Download the Form: Visit the website of the Kansas Secretary of State and download the Articles of Dissolution form, it is easy to fill out as long as you have relevant information about your business.
Complete the Form: Provide the following information:
- Name of the LLC as registered with the state.
- Date of dissolution.
- Any other required details, such as the name and address of a contact person for the LLC.
Submit the Form: You can complete the form online, submit it through mail, or file it in person. You’re required to pay a filing fee of $35 if the submission is done online or $40 if sent by mail or done in person. These fees can be subject to variances which is why it is important to visit the Secretary of State’s website to check for the latest fees. Remember to print a copy of the submission, it is crucial for the records.
4. Notify Creditors and Settle Debts
As soon as the process of dissolution kicks off, it is necessary to inform all creditors, lenders, and any necessary party of the LLC’s intention of dissolution to limit any pending commitments. To do this, follow the steps below:
Send Notices: Write to the creditors to inform them of the dissolution and place a claim time frame which is usually 6 months from the day the notice is distributed.
Settle Obligations: Arrange to pay off all debts still owed including loans, owed taxes, and payments owed to vendors. This has to be done to all financial obligations to avoid being taken to legal cases in the future.
Distribute Remaining Assets: After settling all debts with the members of the LLC, then further remaining assets are shared among them as per the Operating agreement place or where such an agreement does not exist in the legal provisions under the Law of Kansas. The assets will be shared and this will need to be documented for shedding light and ensuring compliance.
5. Canceling the business license
For the three members to fully complete the LLC, they would have to cancel all the affiliations that the company has, which are business licenses, permits, and registrations. It consists of:
- Local and state licenses.
- Federal Permits.
- Specialized Industry Licenses (if applicable).
You would also have to reach out to the agencies that issued the affiliation to make certain that the revocation steps have been made. Revoking permits and licenses without cancellation(business permits) can ensue penalties.
6. Declare Final Tax Returns
There are several processes when it comes to liquidating an LLC, and one of them includes declaring taxes. This is done to avoid future liabilities with the various tax authorities. In that regard, here is what needs to be done:
Kansas Business Tax: In the case where there are permits remaining, a Kansas business tax return should be filed, and it should be marked with “Final Return” to indicate that the violence of an LLC has ceased.
Federal Tax: Fill out the relevant IRS forms to declare, including the final return, which will contain schedules such as Schedule C or K-1.
Employment Taxes: If the LCC had employees, all employment taxes including final forms should be returned. Use and file necessary payroll forms like Form 941 or Form 940.
Sales Tax: For LLCs that are imposed with tax for selling products, een taxes with sales that were not included during the last sales tax declaration returned. If there are payments that are not collected by then, they should be paid.
7. Maintain Records
After dissolving your LLC, it is essential to retain copies of all important documents for future reference. These documents may include:
- Articles of Dissolution.
- Final tax returns and supporting schedules.
- Proof of debt settlements and asset distributions.
- Meeting minutes or written consent approving the dissolution.
- Notices sent to creditors.
It is best to keep these records for a minimum period of 7 years because they may be needed for tax audits, lawsuits, or a multitude of other reasons, so take care of it.
8. Notify the IRS and Close EIN
Every time an LLC is dissolved, a notice should be directed to the IRS canceling the employer identification number required to issue me an EIN. For this purpose, you should:
- Compose a letter addressed to the IRS with your EIN, the name of the LLC and your address with the email.
- Advise the IRS of the dissolution and state how you would wish to proceed such as disbandment of this number.
- Provide IRS with the Articles of Dissolution or other relevant documents in support of the information provided.
Ensure this letter reaches the right IRS office. With this step, it is ensured that this EIN will not remain traceable to the LLC and future taxes will not need to be paid.
What Services EasyFiling Offers
Terminating an LLC can be a very time-consuming endeavor but with EasyFiling, the whole process feels effortless. Our services include:
Specialist Support: We aim to assist you with every single step involved in the dissolution process making sure that you check every requirement off the list.
Document Preparation: We take care of both preparing and submitting the Articles of Dissolution to the Secretary of State in Kansas.
Tax Filing: EasyFiling works with you on your final tax filing while also ensuring that both US and Kansas laws are being followed.
Creditor Notifications: We also offer templates and instructions on how you can inform your creditors and pay remaining debts.
Custom Support: Our staff provides excellent support and comes up with appropriate solutions in case your LLC faces any issues while being dissolved.
You can take care of anything else such as the next stage of your business while we deal with any administrative responsibilities that come with LLC termination with EasyFiling. Book a free consultation today to dissolve an LLC in Kansas.
Frequently Asked Questions (FAQs)
How long does it take to offer articles of LLC Liquidation in Kansas?
The turnaround time for Articles of Dissolution resets varies. For instance, filing documents online typically gets done in a couple of days, however, mailing the documents takes up to 1-2 weeks. It would be wise to contact the Secretary of State in Kansas concerning the caps and other matters frequency.
What will happen if I just decide to not Liquidate my LLC formally?
Neglecting the proper process of Liquidation could lead to the company incurring monthly maintenance fees, state penalty tax dues besides accruable penalties. Also, LLC in this scenario would still be considered as being operational which it was not meant to and thus creating later problems.
If I end my LLC do I have to reach out to the IRS?
If I were to dissolve my LLC, it would be crucial to advise the IRS of this change. It is also a requirement to file your last tax return alongside asking the IRS for the cancellation of the EIN preventing any set relationship in taxes with LLC.
Are there Sensitive fees associated with LLC Dissolution in Kansas?
About the articles of dissolution filing in Kansas, there is a filing fee, of $35 for people who want to fill the form online and $40 for those who prefer to make the filing by post or in person; However, there could be more barring debts and taxes, fees and building payments used to do settling in Kansas.
Nabin Adhikari
