The New York Department of State Division of Corporation will never know your LLC has ceased to operate as a business, even if you've finished closing your brick-and-mortar store. LLC dissolution will only be completed and deemed valid if you file papers properly. Here is the dedicated post on how to dissolve your LLC we wrote earlier.
This post is ALL YOU NEED to help you through all the steps of dissolving a limited liability company in New York, while we also provide the ways to dissolve your LLC in New Jersey, and find out more about dissolving an LLC in Wisconsin, to boot. For those who have set up their business elsewhere, learn more about dissolving an LLC in Florida, learn to dissolve an LLC in Nevada the easy way, or how to dissolve an LLC in Ohio, for example.
How to Dissolve an LLC in New York
If you were hands-on during the forming of your limited liability corporation, the process of LLC dissolution should be straightforward, especially if you were able to write a comprehensive operating agreement at the time you formed your LLC. This operating agreement should detail the terms involving asset division and other relevant information. And if you are just about to set up an LLC, check out the best forming services here.
How Much Does it Cost to Dissolve LLC in New York City?
To dissolve an LLC in New York, you need to pay the filing fee of $60.
Expedited processing comes at an extra cost, depending on how quickly you need those legal papers filed:
- +$25 fee for 24-hour processing
- +$75 fee for same day
- +$150 fee for just 2-hour processing
This request should be submitted in a separate envelope. Place the non-refundable fee inside and write "Expedited Processing" outside.
7 Steps to Dissolve your LLC Limited Liability Company in New York Department of State
Filing the required paperwork to dissolve an LLC can be done with the help of a professional New York registered agent service, or by any member of the limited liability company. Also, learn here how to dissolve an LLC in Delaware the right way, how to dissolve an LLC in Pennsylvania, and find out more about dissolving an LLC in Texas, or dissolving an LLC in Missouri, to boot.
The entire process of dissolving an LLC can be done out of court. You just need to follow the following steps:
1. Shareholders Vote based on Rules of Dissolution
Dissolution, or the death of a corporation, is done by way of a majority vote among the LLC's members. If you don't want to vote anymore, just compile written consent from the majority of the members. Whichever route you take, your decision to dissolve the LLC must be recorded officially in meeting minutes or documented on the consent form. Look at this review to see if this is similar to Kentucky LLC dissolution, or how to dissolve an LLC in Colorado.
Check your LLC's operating agreement to make sure you follow the rules of dissolution. A good operating agreement should indicate how the business divides assets after debts and other financial obligations have been settled. If you have no longer have a copy of this agreement, it is best to follow your state's law on this.
Once the LLC shareholders vote for the dissolution, it is time to prepare for this huge change. Bigger companies usually include a dissolution attorney to create a Plan of Dissolution and Distribution of Assets, which details how your business entity plans to dissolve the LLC, how the LLC assets will be divided, and other additional information.
2. Notify Creditors of Business Closure
It is important to notify creditors, suppliers, vendors, lenders, and other concerned parties that your business has begun the dissolution process to avoid penalty fees or lawsuits in the future. You'd have to finalize all financial obligations you may still have with these third-party companies.
In New York, LLCs are required by law to notify employees about a business closure and settle any wages left or benefits that are rightfully due them. Find out if Georgia LLC dissolution requires you to do the same.
When writing this notification, make sure to include:
- An announcement that your LLC has been dissolved or is being processed for dissolution.
- Contact information (e-mail address or mailing address) where creditors can send possible claims
- Include the deadline for submitting claims (this can be anywhere between 90 to 180 days from the date of notice) and state that claims after the deadline will not be accepted.
3. Settle Any Claims
Once third-party companies have received your notice of dissolution, and some of these companies have sent their claims, the LLC must pay its obligations. And if there is no existing fund to pay off promised payments or debt, it is vital that you make repayment arrangements with the creditor.
If the amount of claims is significant and the LLC currently has no funds to settle the dues, communicate with your creditors. You'd be surprised that most creditors are willing to settle the amount for a lot less than owed.
If you plan to reject a claim, you need an attorney to advise you and help in writing a reply stating that you're rejecting a creditor's claim.
4. Tax Needed Paid & Other Tax Clearance Information
If you already know that your LLC owes taxes to New York State, go ahead and settle all your company's financial obligations before filing your articles of dissolution. Note that even if you didn't have any revenue, payroll, or sales tax for the year before filing for dissolution, you still need to file your final federal tax return using IRS Form 1065. Make sure to tick the "final" box on the "return" option.
The New York State Department of Taxation and Finance (DTF) must be notified so that they could check your records and provide your business with the consent of dissolution two weeks after filing taxes.
Although the New York State Department of Taxation and Finance (DTF) no longer requires LLCs to obtain tax clearance prior to dissolution, the department does recommend you to:
- File your business tax returns (the final one, as explained above)
- File a final Form NYS-45 (quarterly withholding taxes) for LLCs with employees
- File a final sales tax return (for LLCs that sell goods as a business)
You may also choose to digitally file your final return via this e-file software developed by the New York State Tax Department.
5. File Certificate of Dissolution and Articles of Dissolution
Once you have the consent of dissolution, you would need to prepare the certificate of dissolution. The New York State Department of State has blank certificates you can just fill out.
Before you visit the New York State Department of State Division of Corporations, you should have prepared three documents:
- written consent of dissolution (Form TR-960 from State of New York Tax Department)
- certificate of dissolution
- articles of dissolution
You have two ways to file this set of paperwork: either in person or by registered mail.
- New York State
- Department of State Division of Corporations,
- State Records and Uniform Commercial Code
- One Commerce Plaza
- 99 Washington Avenue
- Albany, NY 12231
You must also mail or prepare a check for $60 payable to the New York Department of State.
Once the Department of State accepts the Certificate of Dissolution for filing to dissolve an LLC, you will receive a filing receipt under the name of your organization. The date listed on this receipt technically means the LLC's closing/end of existence. After this process, it is now legal for other companies to use your business name.
6. Winding Up
Dissolving the LLC doesn't happen overnight. Although your company cannot conduct business, it would continue to exist under a phase called "winding up," wherein the company must several tasks such as:
- Dealing with any legal disputes
- Distributing assets to all LLC members
- Closing the LLC's business
- Disposing properties of the LLC (including leased properties that may require advanced rent payments, and so on)
- Discharging the LLC's liabilities (this may include payments to creditors, suppliers, outstanding taxes, and other similar financial liabilities)
One or more LLC members should handle the winding up. This could take several days or longer depending on what kinds of obligations your entity has.
7. Settle Other Obligations
If you've completed all winding up tasks, you may also need to wrap up other obligations, especially if your business wasn't exclusively providing products or services within New York.
If your LLC was registered to provide a service or sell goods in other states, the dissolution you filed in New York does not extend to those particular states. As such, you must seek additional information from every appropriate state covered by your LLC.
Wrap Up: Voluntary vs. Involuntary Dissolution
If you close your business, but do not file articles of dissolution and complete all the steps above, the New York Department of State of Taxation and Finance will be forced to put your LLC into involuntary dissolution.
Involuntary dissolution means there is no positive action done on your part. As such, the Secretary of State will proclaim your LLC dissolved if you don't pay state taxes, or file articles of dissolution for two or more consecutive years.
You may think this gets you out of the responsibilities above, but this will actually cost you more in the long run. Involuntary dissolution will not excuse you from paying your state taxes and other fees. This method will require you to pay new taxes even if you closed shop a year ago since proclamation often takes several years to finalize.
If none of the LLC members can handle the process of dissolving your business entity, it is best to look for a New York-based service provider that could ensure your LLC dissolution gets processed properly.