Key Takeaways

  • Closing an LLC in Ohio requires several key steps, including paying outstanding taxes, filing Articles of Dissolution, and properly winding up business affairs.
  • Ohio law distinguishes between voluntary and involuntary dissolution, and members must follow the correct procedure based on their situation.
  • Before dissolving, LLCs should settle debts, notify creditors, and distribute remaining assets according to the operating agreement or state law.
  • Filings with both the Ohio Secretary of State and applicable tax agencies (including the IRS) are required to complete dissolution.
  • Business licenses, permits, and bank accounts must be canceled to fully close the LLC and avoid future liabilities.

Knowing how to close an LLC in Ohio is important if you decide to dissolve your business. Members must dissolve an LLC to officially close it. This dissolution is essential to ending the corporation since LLCs are separate legal entities.

In the state of Ohio, LLCs must comply with relevant dissolution procedures as stipulated in the Ohio Revised Code Title 17.

Section 1705.43 of the code details the ways in which LLCs may be dissolved. The LLC's article of organization may specify a termination date or the members may agree to end the business. No matter the reason for ending the LLC, a certificate of dissolution must be filed with the secretary of state.

To close an LLC in Ohio, you must undertake several steps.

Close the LLC's Tax Accounts

All active LLCs have tax accounts with different departments under the state government. Before an LLC can be dissolved, all fines and taxes owed on these accounts must be cleared. The following are some of the taxes that LLCs may owe:

  • Employee withholding tax.
  • Unemployment insurance tax.
  • Ohio commercial activity tax.
  • Sales and use tax.

The procedure for closing the tax accounts is simple. All you need to do is file a final return to the appropriate department or agency. However, some tax accounts may require the submission of additional official paperwork.

If you require expert assistance to close the tax accounts, you should consider hiring a certified public accountant.

File Articles of Dissolution

These forms must be filed to voluntarily dissolve an LLC. Once the forms have been processed, the LLC no longer exists. In the state of Ohio, articles of dissolution must be submitted via regular mail.

The process of LLC dissolution in Ohio is part of a larger process termed “Winding Up.”

Some procedures must be carried out before requesting for LLC dissolution approval from Ohio's secretary of state while others will be executed after the SOC grants the approval.

These procedures largely depend on the volume of assets, liabilities, and debts the LLC has accumulated, and whether the LLC has already commenced business.

If the LLC hasn't begun business operations, the process of dissolution becomes easier. Before dissolving your Ohio LLC, you must:

  • Hold a meeting with all LLC members and record the resolution to dissolve the company in the minutes.
  • Clear all business debts.
  • Pay all fines, taxes, and administrative fees owed.
  • Cancel all business permits and licenses.
  • Close the LLC's business bank accounts.
  • File Form 966 with the Federal Internal Revenue Service.
  • Cancel the account associated with the LLC's EIN.

Notify Creditors and Resolve Claims

Ohio law requires LLCs to settle their financial obligations before dissolution is finalized. Steps include:

  • Providing written notice to known creditors and claimants about the pending dissolution.
  • Offering creditors a deadline to submit any outstanding claims (typically no fewer than 90 days after the notice is sent).
  • Evaluating submitted claims and either accepting or rejecting them in writing.
  • If rejecting claims, specifying the reasons for rejection and informing the creditor of their right to pursue legal action.

Proper creditor notification helps limit future liabilities and ensures a smoother dissolution process.

Voluntary vs. Involuntary Dissolution in Ohio

In Ohio, LLC dissolution may occur either voluntarily or involuntarily:

  • Voluntary Dissolution happens when LLC members decide to end the business according to the terms in the operating agreement or through unanimous consent.
  • Involuntary Dissolution can occur through court order due to legal noncompliance, such as failure to maintain a registered agent, file required reports, or pay taxes.

The Ohio Revised Code (§1706.47 - §1706.51) provides legal guidance on how both types of dissolution should be conducted. Understanding which category applies to your LLC is essential for following the correct process.

Time Needed to Legally Dissolve an LLC

The total time taken to dissolve your LLC depends on how long it takes to complete each of the actions detailed above. Once you are done, it will take between three to five business days for the secretary of state to process the certificate of dissolution.

If you do not officially dissolve your LLC, you may end up creating legal and financial problems.

State Fees

Even if your LLC doesn't pay federal taxes, it may be required to pay state fees. These fees are usually paid annually and accumulate regardless of whether your business operates or not. If you stop business activities and do not legally dissolve your LLC, you may eventually be forced to pay these accumulated fees since you didn't inform the state of your intention to close the company.

Paying Bills

Although LLC protect owners from certain liabilities arising from lawsuits, it doesn't protect them from paying their business bills. All business debts must be paid in full before closing the LLC. If you collected loans with personal guarantees, creditors can get a judgment against you. Furthermore, a prosecutor can charge you with fraud and argue that you intentionally incurred the debts with the purpose of using the LLC for protection after the business was closed.

Distribute Remaining Assets

After paying off all debts and obligations, the remaining LLC assets must be distributed to members. Distributions should follow:

  1. The terms of the LLC’s operating agreement (if specified).
  2. If the agreement does not specify, distributions are made proportionally based on each member's ownership interest under Ohio law.

Documentation of these distributions is recommended to maintain clear records in case of future disputes or audits.

Filing Requirements

LLCs are usually required to file various reports in their state of formation. If they fail to file such reports, they may be fined and required to appear before a public official to explain the lack of filings. As such, it's best to legally dissolve the LLC to prevent such occurrences.

Cancel Licenses, Permits, and Registrations

To fully close your LLC and prevent additional fees or legal obligations:

  • Cancel any Ohio business licenses or permits associated with the LLC.
  • Notify any local government agencies if the LLC operated under local permits (e.g., health department, zoning board).
  • Close the business’s Employer Identification Number (EIN) account with the IRS by sending a letter requesting the closure.

Confirm that all necessary agencies have formally acknowledged the cancellations to avoid future compliance issues.

Frequently Asked Questions

  1. How do I know if I need to dissolve my Ohio LLC?
    If your business has ceased operations and you do not intend to continue, formal dissolution is required to avoid ongoing state fees and potential penalties.
  2. Can I dissolve my Ohio LLC online?
    No, as of this writing, Ohio requires Articles of Dissolution to be filed by mail with the Secretary of State. Check the Secretary of State’s website for any updates on electronic filings.
  3. What happens if I do not notify creditors when dissolving my LLC?
    Failing to notify creditors may leave members personally liable for outstanding debts and claims that arise after dissolution.
  4. Do I need unanimous consent from all LLC members to dissolve the business?
    Generally, yes—unless your operating agreement specifies a different voting requirement for dissolution.
  5. How long does the dissolution process take in Ohio?
    It typically takes three to five business days for the Ohio Secretary of State to process the Articles of Dissolution after submission, but the overall timeline depends on how quickly you complete winding up activities.

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