Voluntary Dissolution of a Limited Liability Company

In order to dissolve your LLC, you must do the following:

Check your operating agreement to see the internal rules required to dissolve the LLC. Typically, a vote of a certain percentage of members is required. If the operating agreement is silent as to the procedure for dissolution, New York allows a vote or written consent from a majority of LLC members to dissolve as part of the dissolution of a limited liability company requirements.

Then file Articles of Dissolution within 90 days of the action taken above (vote to dissolve) with the New York Department of State. There is a $60 fee for filing the Articles of Dissolution. The Articles of Dissolution must contain:

Name of LLC (if it has changed, the original name also);

date articles of organization were filed, how the dissolution was authorized (vote to dissolve); and,

an authorized member’s signature.

Winding up refers to the LLC’s final actions as an entity necessary to complete the dissolution of the limited liability company. Typically, a manager of the LLC will take on these responsibilities. Important winding-up tasks include:

Completing all litigation and pending litigation matters

Settling all remaining LLC business

Disposing of LLC property

Discharging the LLC’s liabilities

Distributing the remaining LLC assets to its members

Pay close attention to the last two steps above, dealing with LLC liabilities and property. You must pay liabilities and distribute remaining property in a particular order. Although not required by law, as it is in the dissolution of Corporations, you should obtain tax clearance from the tax department. Also, if your LLC is registered to do business in other states, you must file separately with the relevant state governments as part of the overall dissolution of the limited liability company process.

The dissolution of an LLC can be a complex process, particularly when dealing with the distribution of LLC property. Often, members can be in disagreement as to who should get what. This can lead to litigation, especially when the dissolution of a limited liability company is not handled carefully.

James G. Dibbini and Associates P.C. can provide you with an in-depth and comprehensive approach to dissolving your LLC. To schedule an appointment with an attorney at our firm, please call (914) 965-1011 or email us at jdibbini@dibbinilaw.com to learn more.

Legal Guidance During a Dissolution of a Limited Liability Company

Because disagreements and asset distribution issues can arise, legal support is often essential during the dissolution of a limited liability company. Professional guidance helps manage compliance, reduce conflict, and avoid unnecessary litigation.

FAQs

1. What does voluntary LLC dissolution mean?
   It means members agree to formally close the LLC following legal requirements.
2. Is a vote always required to dissolve an LLC?
   Yes, either as outlined in the operating agreement or by majority consent.
3. When must dissolution documents be filed?
   Generally, within 90 days of member approval in New York.
4. What is winding up an LLC?
   It is the process of settling debts, closing business matters, and distributing assets.
5. Can members disagree during dissolution?
   Yes, asset distribution often leads to disputes if not handled properly.
6. Are taxes involved when dissolving an LLC?
   Yes, and tax clearance is strongly recommended.
7. Does dissolving in New York end obligations in other states?
   No, separate filings may be required in other states.
8. Why work with an attorney for LLC dissolution?
   Legal guidance helps ensure compliance and reduces future legal risk.