To dissolve an LLC in Utah, a precise legal and administrative process has to be followed.
Dissolving a Limited Liability Company involves more than simply setting it aside. There are rules which ensure that state laws are followed and help prevent potential liabilities.
This guide provides a birds-eye view of the process to help you understand it better.
1. Go through the Operating Agreement of the LLC
To begin with the dissolution process, review the operating agreement of your LLC. Typically, this will outline the procedure for dissolution, including, but not limited to:
- Voting criteria of the members.
- Distribution of the assets.
- Ways of informing the stakeholders and members.
In case the operating agreement is silent about the dissolution, the default laws of Utah will be applicable. These laws provide a framework to ensure fairness and compliance.
2. Approve the Member to be Dissolved
The law of Utah specifies that member approval is required to dissolve an LLC. A meeting of the members must be held during which a vote on dissolution is taken. Remember to follow the voting process defined in your operating agreement. For instance, what other percentage of members have to approve the motion?
All decisions should be recorded in screen minutes and in case members agree to the dissolution, a resolution to dissolve the LLC should be signed. This serves as protection against any disputes that may come in the future.
3. File the Certificate of Dissolution
If you want to close the LLC you started, you will need to file a Certificate of Dissolution with Utah’s Division of Corporations and Commercial Code. Here’s how you’re going to do it:
Getting the form: Go to the Utah Division of Corporations site and download the Certificate of Dissolution form. If you are not able to do that, you can ask them in person or send a request in the mail.
Fill in the details: State the date the LLC dissolved, its reason, and its name correctly. Do not forget to cross-check everything since it could result in delays.
Submit: Send the form through email, U.S. mail, or in person. You will need to send a filing fee, usually around $70. Remember to keep a copy of the submission confirmation.
4. Settle Debt & Inform Creditors
Utah law states both lenders and debtors need to settle their finances when the LLC dissolves, so notify the creditors about the dissolution. Don’t forget to let them know the last date to submit claims.
By doing this step, you are ensuring there will be no claims against you from the creditors, and you do not owe any lenders. These notifications can be sent through certified mail to keep a record of the communication.
Don’t let the disputes wait too long, because it can have dire consequences. If things start going sideways, you can reach out to a lawyer.
5. Distribute Remaining Assets
After paying debts, any remaining assets should be divided among the LLC members by the operating agreement or Utah state law. The distribution may involve:
- Selling physical assets.
- Dividing cash reserves.
- Transferring ownership of intangible assets, including intellectual properties.
It is important that all distributions, including receipts and signed acknowledgments, be documented. This practice assists in providing transparency and adherence to legal standards.
6. Cancel Business Licenses and Permits
Any licenses, permits, or registration for businesses related to the LLC should be canceled. This step is vised as it can save your business fees or penalties that may arise in the future. Contact your state and local offices to check that all permits and licenses have been canceled.
Also, if a DBA name was used for the LLC, then a cancellation should be filed with the relevant authority.
7. File Final Tax Returns
The LLC’s final federal, state, and local tax returns must be filed. Make sure to mark the returns as Final Returns for the tax authority to be aware of the closes of the business. Pay relevant outstanding taxes to make sure there are no remaining taxes. Ensure that payroll, sales, and all other industry-relevant taxes comply.
You may wish to check with the IRS to see if point number 7 applies in this case because closing your EIN is something they may want you to do.
8. Preserve Documents
Because of potential litigation or future references, it is prudent to preserve all tax returns, financial information, and even the dissolution documents from the last several years. Depending on the reason, this information may be crucial later on.
In the case of an audit, a dispute, or any query, having the appropriate files remains your best form of protection.
Other Factors
Professional Assistance: If you are not that comfortable with this situation, you might want to consider obtaining an expert in whatever field you feel comfortable with. They will be able to advise, deal with the paperwork, and make sure all requirements have been met.
Communicate with Stakeholders: You should inform your clients and your personnel about the dissolution of the LLC, as well as your business associates and any other relevant parties. This will mitigate confusion and foster goodwill.
Post-Dissolution Responsibilities: Once a business is submitted for dissolution, keep track of any correspondence or problem attempting to get in touch with the business’s accounts. Help is needed to address the communication from the creditors, the tax department, and all other relevant parties.
How EasyFiling Can Help
Filing a dissolution application is not easy, especially as experts are worried about their clients. This is why EasyFiling has made use of professional help, which is what makes their service unique, especially when it comes to filing an LLC dissolution in Utah.
Completing Paperwork Fast: EasyFiling can take care of all the paperwork including the Certificate of Dissolution Form. They make sure all forms are filled correctly and submitted before the deadline.
Compliance Guidance: EasyFiling’s staff comprises experts who will ensure you undertake compliance with Utah law.
Creditor Notifications: EasyFilings can assist you with creating and sending notifications to creditors and making it less administratively taxing for you to conduct business.
Tax Support: They offer help and materials for the final tax return and for closing the EIN with the Internal Revenue Services.
Peace of Mind: You can sit back and not worry about any of the details while EasyFiling does all the legal procedures needed to help your business close down hassle-free.
Book a free consultation today to dissolve an LLC in Utah.
Dissolving an LLC in Utah FAQs
1. What is the average time for LLC dissolution services in Utah?
The average dissolution period of an LLC in Utah is computed based on the time you will take to complete and submit the relevant documents. The state will normally start the processing of the dissolution within 1 to 2 weeks once the Certificate of Dissolution is submitted. Online submission may be more effective.
2. What are the possible outcomes if my LLC is not dissolved in the right manner?
Your LLC may incur recurrent fees from the state, taxes, and even legal charges if it is not properly closed down. This process is important to undertake officially.
3. What are my IRS obligations after dissolving an LLC?
It is correct to indicate you should complete your final return. Along with the Final Return, you must also file your last federal tax return for your business entity. This will also serve as the basis for finaling with your EIN.
4. Is it possible to bring my LLC back to life after it has been dissolved?
If you voluntarily dissolved your LLC in Utah, it can be reinstated. You only need to ensure necessary fees are paid, and required filings are completed. You may be required to submit a reinstatement application and pay a fee.
5. What is the process and price for dissolving an LLC in Utah?
In Utah, the Certificate of Dissolution has a filing fee that is typically around $70. This fee may be higher if you also include attorney’s fees or debt settlement fees and inform the creditors.
Nabin Adhikari
