If you are ready to close your LLC business for whatever reason but have no idea how to dissolve an LLC in Ohio, this post is all you need to close your limited liability company properly. Moreover, we give you a general guide on how to dissolve your LLC and also provide a review of the best LLC formation services for those who are setting up a business.
Since the LLC is a separate legal entity, dissolution is essential to ending the business. Otherwise, you (and members of the LLC) may face liabilities, penalties, and other issues in the future.
4 Steps to Dissolve an LCC in Ohio
The Ohio Secretary of State has the power to dissolve any business entity (like your LLC) in a process called involuntary dissolution. This occurs when LLCs no longer fulfill their obligations with the state (such as filing annual reports or paying taxes). Unfortunately, leaving your LLC to face this fate means the LLC and all the members won't have a good standing with the Ohio Secretary of State anymore.
LLCs could also voluntarily dissolve the business following these four steps:
1. Pre-Dissolution Requirements
For a limited liability company to be dissolved, the Ohio Secretary of State will only grant dissolution approval if you've met several requirements.
Note that not all Ohio LLC businesses may need to follow these requirements since these largely depend on the size of the company, years operating, the volume of assets, debts incurred, and so on.
To begin LCC dissolution with the Ohio SOS, you must:
- Hold a meeting with the LLC members. Vote for/against the dissolution of the company. You must record the final minutes of this meeting. Most states require you to include this when filing.
- Settle all debts incurred by the LLC.
- Close or cancel any business license or permit
- Pay all employee salaries and benefits.
- Clear all taxes, fines, and administrative fees owed to the Ohio Secretary of State.
- Close LLC business bank accounts
- Notify customers, vendors, and creditors of your dissolution. ( Some states like PA, as explained here, don't require this step)
When you formed an Ohio LLC, your business was required to create an operating agreement. If you submitted the operating agreement to the Secretary of State, you are halfway there since the operating agreement document includes instructions on what to do in the event that you have to dissolve the company.
2. Close the LLC's Tax Accounts
A limited liability company, corporation, and any other business entity that operates in Ohio are required to pay taxes. However, once you decide to dissolve your LLC, you must close the tax accounts under your LLC's name.
Note that tax accounts in a typical Ohio LLC would vary depending on what kind of business you have, how many employees you had, or what terms are included in the operating agreement.
LLC dissolution with the Ohio state will only be finalized if your company pays all fines and taxes owned on the LLC's tax accounts. These accounts may include:
- Employee withholding tax (for LLCs with employees)
- Unemployment insurance tax (for LLCs with employees)
- Ohio commercial activity tax
- Sales and use tax (for LLCs that sell taxable goods and services)
The actual closing of the tax account is simple since you'd only be filling out a standard tax return, except this time, you'd have to tick the "final return" box.
To close each tax account, your Ohio LLC would have to file a form to their respective Ohio agencies. For example, Form 966 with the Federal Internal Revenue Service.
If relevant, you may also have to cancel the account associated with the LLC's EIN. If you are unsure what tax accounts your business has to close, you could hire business services of a certified public accountant or business lawyer to help you file form by form.
3. Obtain Tax Clearance and Other Certifications
For an Ohio LLC to be dissolved, the state requires the LLC business to pay state fees and complete clearance. These include:
- Notarized Affidavit of Personal Property. The LLC business must file this to identify where the corporation has personal property within any counties in Ohio
- Tax Clearance Certificate. You must file a request to obtain this certificate from the Ohio Department of Taxation. Filing this ensures your business has cleared off any tax obligations.
- (For any Ohio LLC with employees) Evidence/proof of paid fees: If your Ohio LLC operated with employees, you need to show proof that you have made all payments for their Unemployment Compensation Fund or Ohio Bureau of Workers’ Compensation fund. You would have to file proof with the Ohio Bureau of Job and Family Services.
4. File the Articles of Dissolution
The most important form out of all LLC forms is the Articles of Dissolution. This
To dissolve an Ohio LLC, you have two options:
File the form by regular mail: Download the Articles of Dissolution form and fill it out. If it is possible to include all LLC members and a business attorney in this step, do so. Send the form along with checks payable to the Ohio government addressed to:
- Secretary of State, Business Services Division (180 E. Broad St., 16th Floor, Columbus, OH 43215). Make sure to write the word "EXPEDITED" outside the envelope if you wish to expedite the process and have included extra fees on top of the regular filing fee.
- Non-Expedited Mail: Ohio Secretary of State (PO Box 1329, Columbus, OH 43216)
Ohio LLC Dissolution Frequently Asked Questions
If you prefer not to hire third-party business services to help you in the dissolution of your LLC or corporation, these additional questions could clear out some FAQs:
How Much Does it Cost to Dissolve LLC in Ohio?
A regular dissolution filing has a $50 filing fee.
If you wish to expedite the process, you need to add these extra fees:
- $100 within 2 business days (possible also by mail: send the form and check addressed to Ohio Secretary of State (PO Box 1390, Columbus, OH 43216)
- $200 for 1 business day (only for walk-ins)
- $300 for 400-hour expedited process (only for walk-ins)
How long Does it Take for the State of Ohio to process the Filing?
Processing of these forms would take between 4 hours to 6 business days, depending on the method you chose for submitting the form.
- Mail, fax processing, and regular in-person filing takes 3 to 5 working days
- Expedited processing level 1 only takes 2 business days (but only for walk-ins and expedited mail filings
- Expedited processing level 2 only takes 1 business day, but it is only available for walk-ins
- Expedited processing level 1 only takes 4 hours if you submit by 1 pm. Same-day processing is not available if you submit after 1 pm.
Once the Ohio Secretary of State processed the form, your Ohio LLC will no longer exist. Your Ohio LLC will be sent a Certificate of Dissolution directly to the mailing address you assigned on the form. You can also print out a copy of the Certificate of Dissolution from your online account.
From here on out, any corporation can use your business name and operate in Ohio as an LLC or any other business entity.
Are there Other Ohio Secretary of State Requirements?
The State of Ohio does not require newspaper publication when notifying creditors about the dissolution of your LLC. However, it is always recommended to send notices to known claimants to avoid future issues.
What Winding Up Tasks Should my Ohio LLC Complete?
Filing dissolution forms is the easiest step out of the entire dissolution process. The longer, more complicated tasks are part of the winding-up phase where the LLC may clear its business affairs and obligations within a given time.
Liquidating assets, or selling LLC properties are examples of winding up tasks that may not be listed as a requirement for dissolution but are undertaken by almost every LLC that closes shop.
How do I Handle my Foreign LLC?
Do not forget to notify the IRS and other state agencies about your Ohio LLC dissolution. Some Ohio departments may not have a copy of the LLC certificate of dissolution.
This is also the case with an LLC that is legally able to operate in other states. If your LLC is classified as a foreign LLC (meaning, it was formed in another state), note that you'd have to file, obtain a certificate of dissolution, and close all legalities required by all relevant states as well.
Dissolving an Ohio LLC pretty much follows the process of dissolution filings in other states. The important thing is you (or any of the LLC members) followed the appropriate steps in dissolving an Ohio LLC properly.
While the legal dissolving or closing of an LLC may seem like a lot of work at first, the fact that you will not be liable for any lawsuits, penalties, or claims made against your dissolved LLC in the future should be enough reason to complete all these steps.