Dissolving a Delaware LLC is the process of legally terminating its existence as a business entity.

Dissolving Your LLC

Ending the existence of your Delaware LLC begins with the process of dissolution. The LLC agreement of most LLCs contain a section outlining the process of voluntary dissolution.

Usually, the process involves bringing a resolution to dissolve the LLC before the members, which must be passed with the stipulated percentage of votes. Voting on the resolution can be done in person or in writing. You must follow specific procedures regarding advance notice, time, and venue of the meeting.

Delaware's LLC law becomes applicable to the extent of dissolution provisions not mentioned in your LLC agreement. It requires written consent or votes of members holding more than two-thirds of the ownership in the company.

Whether you are dissolving it according to your LLC agreement or Delaware's LLC law, you should record members' approval for dissolution in the minutes of the meeting or on a consent form.

How to Dissolve a Delaware LLC

  1. Wind up the company's business.
  2. Get members consent for dissolving the LLC.
  3. Pay the outstanding franchise tax, if any, in order to get clearance from the franchise tax department.
  4. File the Certificate of Cancellation with the state, along with a cover letter and a filing fee of $200.

You can revoke the dissolution within three years from the date it becomes effective. However, your business name should not have been taken up by some other business. If the LLC has become void and its name is not available any more, then you must change the name and file a name amendment form with the state, along with the necessary filing fee.

In the federal tax return, you should tick the “final return” box on Form 1065 or Form 1120, depending upon whether your LLC is being taxed as a partnership firm or a corporation.

Get Clearance From State Franchise Tax Department

Find out if there is any outstanding Delaware Franchise Tax to be paid by your LLC. You can call or email the Franchise Tax Section for this purpose. The department will let you know the amount due and the method of payment. You may have to pay penalties and interest in case of missed payments and delays.

Usually, you can pay through credit card (online or mail) or check (mail).

Online Payment Through Credit Card:

  • Find your Business Entity File Number by searching with your LLC name.
  • Visit the DCIS-eCorp website.
  • Enter your Business Entity File Number and proceed.
  • Save or print your payment receipt. You'll have to send this along with the Certificate of Cancellation.

Payment Through Check by Mail

  • Issue a check for the outstanding amount of franchise tax in the name of “Delaware Secretary of State.”
  • Mail the check along with the Certificate of Cancellation.

Payment Through Credit Card by Mail

  • Include your credit card information in the cover letter accompanying the Certificate of Cancellation.
  • Authorize the franchise tax section to charge the outstanding amount to your credit card. This can be done in the comments or instructions section of the cover letter.

Cover Letter or Filing Memo Instructions

You can download the instructions from here.

Priority

  • Choose your priority processing time by checking the priority box at the top right corner.
  • Choose Priority Box 7 for regular processing time, which is about three weeks.
  • You need to pay a higher fee for faster processing.

Submitter's Information

  • Enter your details like name, address, phone number, and email ID in the “Submitter's Information” box.
  • Leave the “Account Number” blank.
  • The “Attention” line would also be blank since the submission is in your personal name.

Document Filing Request Information

You don't need to fill out anything in this section.

Other Document Filing Information

This section too can be blank.

Method of Return

Tick “Regular Mail” for standard method of return. Alternatively, mention your FedEX or UPS account number if you have a prepaid account with them.

Credit Card Information

Enter your credit card details only if you are paying through credit card. Leave it blank if you are paying by check.

Comments or Filing Instructions

This should be filled only if there is an outstanding franchise tax and you would like to pay it with your credit card. In all other cases, leave it blank.

If you need help with dissolving a Delaware LLC, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.