# How to dissolve an LLC Source: https://joinopenfile.com/guides/how-to-dissolve-an-llc Index: https://joinopenfile.com/llms.txt Dissolving an LLC takes three things: a decision to dissolve under your operating agreement or your state's statute, winding up the business by paying what it owes and distributing what is left, and a filing with the state that formed it. That filing is called articles of dissolution in some states and a certificate of cancellation in others. Until it is on record, the SBA warns that failing to legally dissolve an LLC with any state you are registered in will expose you to continued taxes and filing requirements.Updated November 8, 2026 ## Check your operating agreement first, then the statute The agreement decides this where it says anything. Delaware's LLC Act dissolves a company at a time or on an event specified in the limited liability company agreement, and otherwise on the vote or consent of members who own more than two thirds of the then current percentage or other interest in the profits. Florida's statute is stricter by default: an LLC dissolves on an event the operating agreement states causes dissolution, or on the consent of all the members. Both also dissolve a company that has gone 90 consecutive days with no members, and both allow a court to order dissolution. So the vote you need depends on your state and on what your [operating agreement](https://joinopenfile.com/guides/operating-agreement) says. Read it before you call a meeting. ## Write the decision down The state form asks about it. Florida's articles of dissolution must state the name of the company, the occurrence that resulted in its dissolution, a delayed effective date if the dissolution is not to take effect when the articles are filed, and, if there are no members, the name, address and signature of the person appointed to wind the company up. Other states ask who authorized the dissolution and on what date. A short written consent signed by the members, kept with the company's records, covers every version of the question. ## Wind up: creditors first, owners last Dissolution does not end the company. Florida says that on the filing of the articles of dissolution the company shall cease conducting its business and shall continue solely for the purpose of winding up its affairs. Delaware lets a manager who has not wrongfully dissolved the company wind it up, or members owning more than 50 percent of the then current percentage or other interest in the profits, and the Court of Chancery can appoint a liquidating trustee instead. The payment order is not optional. Delaware's statute pays creditors first, including members and managers who are creditors, then members and former members what they are owed in distributions, then members the return of their contributions and finally whatever is left in the proportions in which they share distributions. The company has to pay or make reasonable provision for all known claims, for pending litigation and for claims likely to arise or become known within 10 years after dissolution. Paying yourself ahead of a creditor is the mistake that follows people after the company is gone. ## File your final federal returns The IRS wants the last return marked as the last one. A partnership checks the final return box near the top of the front page of the return and the final K-1 box on each Schedule K-1. An LLC taxed as a corporation files Form 1120, or Form 1120-S for an S corporation, for the year the business closes. A single owner reporting on Schedule C files it with the individual return for the year the business closes. [Single-member LLC taxes](https://joinopenfile.com/guides/single-member-llc-taxes) covers which schedule that is. If you had employees, check the box that tells the IRS the business has closed and enter the date final wages were paid on line 17 of Form 941 or line 14 of Form 944, and file Form 940 for the calendar year in which you paid final wages. Give each employee a Form W-2 for that year, and report payments of $600 or more to a contractor for services on Form 1099-NEC. Keep the paperwork. The IRS says to keep all records of employment taxes for at least four years, and to keep property records until the period of limitations expires for the year you dispose of the property. ## Some states want the tax agency cleared first Texas is the clearest example. The Comptroller wants any required final franchise tax report, covering the day after the last annual report accounting period end date through a date within 60 days of the termination date, and you then request a certificate of account status online through Webfile or on Form 05-359. The certificate is valid through December 31 of the year it is issued, and the Secretary of State needs it with the termination forms and filing fee. California does it on the form. The Certificate of Cancellation, Form LLC-4/7, carries a tax liability statement that all final returns required under the California Revenue and Taxation Code have been or will be filed with the Franchise Tax Board, and the form says not to alter it. Delaware does it by refusing to file. Every domestic LLC owes a $400 annual tax due on the first day of June following the close of the calendar year, unpaid tax bears interest at 1.5% for each month or part of a month, and the Secretary of State will not accept almost any certificate for filing from a company that owes it. [Annual reports by state](https://joinopenfile.com/annual-report) has what your state charges while the company is still open. ## File the state's dissolution document The name of the document changes with the state. Florida takes articles of dissolution, and the Division of Corporations files them and issues a certificate of dissolution once they conform to law. Delaware takes a certificate of cancellation, filed on the dissolution and the completion of winding up, stating the company's name, the date its certificate of formation was filed, any registered series not already cancelled and any future effective date. The statute sets the fee for it at $180. California splits it in two. If the vote to dissolve was by all of the members, Form LLC-4/7 on its own cancels the registration. If it was not, a Certificate of Dissolution, Form LLC-3, has to be filed before or together with it under Corporations Code section 17707.08(a). There is no Secretary of State fee for the cancellation, and a certified copy is $5. On the effective date the company's powers, rights and privileges cease in California. We can [file the dissolution](https://joinopenfile.com/dissolution) for you in any state, with that state's fee on top. ## Cancel everything else The state filing closes the company. It does not close the accounts. The SBA says to cancel the registrations, permits, licenses and business names you no longer need, including your trade name, to protect your finances and reputation. If you registered a [DBA](https://joinopenfile.com/guides/what-is-a-dba), cancel it where you filed it. Closing the IRS business account takes a letter. The IRS asks for the entity's EIN, its legal name, its address, the EIN assignment notice if you still have it, and your reason for deactivating, and it keeps the current mailing address on its own page for canceling an EIN. It also says all outstanding returns have to be filed and any tax owed paid before it can deactivate the number. The EIN does not go away: once the IRS assigns one to a business entity, it becomes that entity's permanent federal taxpayer ID number. On employees, the SBA points at the Department of Labor's Worker Adjustment and Retraining Notification Act for payment after closing, along with other federal and state laws. A larger layoff has notice rules, so check them before you set a closing date. ## What happens if you just stop filing The state closes the company eventually, on worse terms. Florida administratively dissolves an LLC that has not delivered its annual report by 5:00 p.m. Eastern Time on the third Friday in September, and does it on the fourth Friday in September. It also dissolves a company that owes a fee or penalty, that has no [registered agent](https://joinopenfile.com/guides/registered-agent), or that has not filed a statement of change for its agent within 30 days, in those cases after serving notice and giving 60 days to fix it. Meanwhile the bills keep running. Delaware's unpaid annual tax takes 1.5% interest a month, and the SBA's warning is that not dissolving leaves you exposed to continued taxes and filing requirements. A cancelled Delaware LLC also cannot be issued a certificate of good standing, which is the document a bank or a buyer asks for. Filing the dissolution yourself is cheaper than any of that. ## Questions How much does it cost to dissolve an LLC? It depends on the state. California charges no Secretary of State fee for a Certificate of Cancellation, and Delaware's LLC Act sets the fee for a certificate of cancellation at $180. On top of the filing fee, states that charge an annual tax or report generally want what is owed before they will accept the filing. What is the difference between dissolving and cancelling an LLC? In Delaware they are two steps. Dissolution is the event that starts winding up, and the certificate of cancellation is filed after the dissolution and the completion of winding up. In other states one filing does both, which is why the document is called articles of dissolution in Florida and a certificate of cancellation in California. Do I have to dissolve an LLC that never made money? If you want the state obligations to stop, yes. The SBA says failing to legally dissolve an LLC or corporation with any state you are registered in will expose you to continued taxes and filing requirements, and that applies to a company that never traded. Do I need to file a final tax return for a dissolved LLC? Yes, for the year the business closes. The IRS says to check the final return box near the top of the front page of a partnership return and the final K-1 box on each Schedule K-1. A single owner files Schedule C with the individual return for that year, and an LLC taxed as a corporation files Form 1120 or Form 1120-S. Can I dissolve an LLC if one member says no? It depends on your operating agreement and your state. Delaware's default is the vote or consent of members who own more than two thirds of the then current percentage or other interest in the profits. Florida's default is the consent of all the members, so one holdout blocks it there. Do I file Form 966 to dissolve my LLC? Form 966 is the form a corporation or a farmer's cooperative files when it adopts a resolution or plan to dissolve or to liquidate any of its stock, within 30 days of adopting it, with a certified copy of the resolution attached. An LLC taxed as a partnership or reported on its owner's return is not filing it. Ask your accountant if you elected corporate treatment. [Start my business for me](https://joinopenfile.com/signup?next=%2Fstart) $0 + state and processing fees. Takes seconds. ## Sources - [IRS: Closing a business](https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business) - [IRS: Canceling an EIN, closing your account](https://www.irs.gov/businesses/small-businesses-self-employed/canceling-an-ein-closing-your-account) - [IRS: Form 966, Corporate Dissolution or Liquidation](https://www.irs.gov/pub/irs-pdf/f966.pdf) - [SBA: Close or sell your business](https://legacy.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) - [Delaware LLC Act, section 18-203](https://delcode.delaware.gov/title6/c018/sc02/index.html) - [Delaware LLC Act, sections 18-801 to 18-805](https://delcode.delaware.gov/title6/c018/sc08/index.html) - [Delaware LLC Act, sections 18-1105 and 18-1107](https://delcode.delaware.gov/title6/c018/sc11/index.html) - [California Secretary of State: Form LLC-4/7, Certificate of Cancellation](https://bpd.cdn.sos.ca.gov/llc/forms/llc-4-7.pdf) - [Florida Statutes section 605.0701](https://www.flsenate.gov/Laws/Statutes/2025/605.0701) - [Florida Statutes section 605.0707](https://www.flsenate.gov/Laws/Statutes/2025/605.0707) - [Florida Statutes section 605.0709](https://www.flsenate.gov/Laws/Statutes/2025/605.0709) - [Florida Statutes section 605.0714](https://www.flsenate.gov/Laws/Statutes/2025/605.0714) - [Texas Comptroller: Terminate or reinstate a business](https://comptroller.texas.gov/taxes/franchise/reinstate-terminate.php) ## Keep reading - [What is an LLC?](https://joinopenfile.com/guides/what-is-an-llc) - [LLC advantages and disadvantages](https://joinopenfile.com/guides/llc-pros-and-cons) - [What is an LLC operating agreement?](https://joinopenfile.com/guides/operating-agreement) - [How to start an LLC](https://joinopenfile.com/guides/how-to-start-an-llc)