Key Takeaways

  • Arizona LLCs can be dissolved voluntarily or involuntarily depending on compliance and member decisions.
  • The operating agreement and articles of organization guide the dissolution process.
  • A formal vote and written resolution from members are required in most cases.
  • All creditors must be notified, debts resolved, and tax obligations cleared before filing dissolution documents.
  • Articles of Dissolution must be submitted to the Arizona Corporation Commission to officially terminate the LLC.
  • Special rules apply if the LLC never conducted business or if no members remain.

When you dissolve LLC Arizona, you officially end the existence of the corporation as an entity registered in the state. This means creditors and anyone suing the corporation can no longer claim against it. The process for dissolving an LLC is called dissolution.

Recurring Fees and Penalties

The moment you register your limited liability corporation, or LLC, with the AZ Corporation Commission, your LLC becomes responsible for recurring obligations from both the Arizona Corporation Commission and the AZ Department of Revenue. If your AZ LLC fails to file the required reports and pay all taxes due, then your LLC could be held responsible for penalties that add up even more the longer they go unpaid.

Administrative Dissolution by the State

If an Arizona LLC fails to comply with state requirements, such as filing reports, paying fees, or maintaining a statutory agent, the Arizona Corporation Commission (ACC) can initiate administrative dissolution. The ACC will typically issue a notice of delinquency and provide a grace period to correct the issue. If the business does not respond, the LLC’s legal status may be revoked. Once dissolved, the LLC loses its liability shield and cannot legally conduct business until reinstated or properly terminated.

Involuntary Dissolution

An outside force, like a court decree or administrative failure to to keep the state of Arizona informed if your business place moves, can lead to the involuntary dissolution of an LLC. Failing to pay state fees and penalties can also lead to involuntary dissolution.

Voluntary Dissolution of an LLC

The articles of organization and the operating agreement are the two documents you need to examine within the company's paperwork when you want to voluntarily dissolve your LLC. At least one of these documents should contain the required information explaining how your LLC will be dissolved.

A vote is usually required, whereby all of the LLC's members weigh in on the matter of dissolving the company, and the document should note what percentage of the vote is required to approve a dissolution. Adhere to any procedural requirements listed in the rules for dissolving the LLC. These can include things like setting the meeting time and how much advance notice is required before the meeting.

Early Dissolution Before Starting Business

If the LLC never conducted business or issued memberships, the dissolution process is much simpler. The organizer or initial members may approve dissolution without the formal procedures required for operating businesses. In this case, the Articles of Dissolution can be filed directly with the ACC without notifying creditors or distributing assets.

Required Procedures

Some things required before approval to dissolve an LLC can be pursued with the Arizona Corporation Commission, and there are also some tasks that must be completed after the LLC dissolution has been approved. The factors that determine what you have to do include:

  • Whether the LLC is already in business
  • The amount of assets the LLC has
  • How much debt the LLC carries
  • The amount of liabilities associated with the LLC

The dissolution process is simpler if the LLC hasn't yet begun operations in Arizona.

Winding Up the LLC’s Affairs

Once dissolution is approved, the LLC must go through a winding-up process before it is officially terminated. This includes:

  • Collecting accounts receivable owed to the LLC.
  • Liquidating company assets and converting property to cash.
  • Distributing remaining assets to members after paying creditors and taxes.
  • Closing bank accounts and business licenses to prevent further obligations.

Arizona law requires that distributions to members follow the rules outlined in the operating agreement or, if silent, in proportion to ownership interests. Failing to properly wind up can leave members personally liable for unresolved obligations.

Holding a Member's Meeting

At the Member's meeting, it's necessary to hold a vote and record a resolution of the members' agreement to dissolve the LLC. Be sure the minutes include all the details of the vote, and keep the minutes for your records. More than half the members of the LLC must agree, in writing, to dissolve your LLC. If one or more LLC members would get more than half the LLC's assets, that person or those people must also agree to dissolve the LLC, in writing. If your LLC has no members, then the organizer has to handle applying for LLC dissolution.

Special Cases When No Members Exist

If an LLC has no members due to withdrawal, death, or resignation, Arizona law allows the organizer or a legal representative to dissolve the company. In some cases, courts may appoint a person to wind up the LLC’s affairs. This ensures that creditors are paid and assets are distributed even when no members remain to oversee the process.

Resolve the LLC's Debts

To resolve all debts for an LLC, all creditors have to be given notice that the LLC is about to dissolve. A mailing address must be delivered to each creditor so they have a chance to submit claims. They must also be given a deadline to submit their claims.

Publishing a notice of dissolution isn't required by the Arizona Corporation Commission, but it is a convenient way to let stakeholders who may have a claim against your LLC know it is dissolving. Also, if someone tries to make a claim against the LLC after it has been dissolved, having proof that you published the notice can be useful.

Pay Taxes and Fees the LLC Owes

Paying all taxes and fees that are owed is required before dissolution is permitted by the state. Some of the main taxes that are owed on dissolution include:

  • Unemployment insurance tax if you had employees
  • Employee withholding tax
  • Arizona Transaction Privilege Tax
  • Other taxes specific to your industry

Federal and Local Tax Considerations

In addition to state-level taxes, an LLC must:

  • File a final federal tax return with the IRS and check the box indicating it is the final return.
  • Provide final K-1 schedules to members if taxed as a partnership or S corporation.
  • Pay any city or county taxes, as some Arizona municipalities impose additional fees or licenses.

Clearing all obligations ensures members are not pursued for outstanding liabilities after dissolution.

Filing Your LLC's Articles of Dissolution

The forms you voluntarily submit to dissolve an LLC are called the articles of dissolution. You can fax or mail these documents to the Arizona Corporation Commission: Corporations Division: Corporate Filings Section. After the forms have been filed and processed, then the LLC ceases to exist.

Filing Requirements and Fees

The Articles of Dissolution (Form L-018) must be submitted to the Arizona Corporation Commission. Filing can be completed online, by mail, or in person. Key points include:

  • Filing Fee: Currently $35, with an additional $35 if expedited processing is requested.
  • Processing Time: Standard filings may take several weeks; expedited service typically shortens this to a few business days.
  • Information Required: The LLC’s name, date of dissolution authorization, and a declaration that debts have been resolved.

Once approved, the ACC updates public records to reflect that the LLC is no longer active. Members should retain copies of all filings for their records.

Frequently Asked Questions

  1. How long does it take to dissolve an LLC in Arizona?
    Standard processing may take several weeks, but expedited filings with the ACC can be approved in a few business days.
  2. Can I dissolve an Arizona LLC online?
    Yes. The Articles of Dissolution can be filed online through the Arizona Corporation Commission’s eCorp system.
  3. Do I need to notify creditors before dissolving my LLC?
    Yes. Creditors must receive notice and be given a deadline to submit claims before assets are distributed.
  4. What happens if my LLC never conducted business?
    If your LLC never operated, you can file Articles of Dissolution without going through the full winding-up process.
  5. Am I personally liable for debts after dissolution?
    Members are not personally liable if all creditors and taxes are properly addressed, but unresolved obligations can create liability risks.

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