Dissolving an Arizona LLC: Everything You Need to Know
When you dissolve LLC Arizona, you officially end the existence of the corporation as an entity registered in the state.3 min read
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.
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.
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.
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.
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
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.
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