How to Close an LLC in Ohio: Everything You Need To Know
Knowing how to close an LLC in Ohio is important if you decide to dissolve your business.3 min read
2. File Articles of Dissolution
3. Time Needed to Legally Dissolve an LLC
4. State Fees
5. Paying Bills
6. Filing Requirements
Updated September 30, 2020:
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.
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.
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.
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.
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.
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