How to Dissolve an LLC in Colorado?
You are required to let the Colorado Secretary of State department know of your intentions to cease business activity by filing an Articles of Dissolution.3 min read
2. Is the Dissolved LLC Responsible for Tax and Reporting Obligations?
3. What Is a Voluntary Dissolution?
4. What Is Notice of Dissolution?
5. Do Registration Licenses Require Fiscal Obligations?
6. What Forms Are Needed to Dissolve the LLC?
Want to know how to dissolve an LLC in Colorado? A limited liability company, LLC, operating in the state of Colorado has specific reporting and tax obligations once the Secretary of State approves the LLC's Articles of Organization and is registered with the state. Failing to meet the tax and reporting obligations by deadlines set forth will cause the LLC to incur penalties.
How to Close an LLC in Colorado
If you want to close your business, you are required to let the Colorado Secretary of State department know of your intentions to cease business activity by filing an Articles of Dissolution.
The Articles of Dissolution can be submitted online. Once the Colorado Secretary of State receives your request and determines your LLC obligations have been met, the Secretary of State will approve the dissolution for processing. The processing method is referred to as the Colorado LLC Dissolution. This process will dissolve your business and end its legal existence once completed.
Is the Dissolved LLC Responsible for Tax and Reporting Obligations?
As previously mentioned, your LLC is immediately responsible for tax and reporting obligations as soon as the LLC is registered. In the event you decide to close your business and fail to file an Articles of Dissolution, you will continue to incur penalties, which will increase as time goes on. Your LLC will be responsible for all recurring fees and penalties until your LLC has met all obligations and is dissolved by the Colorado Secretary of State.
It is the LLC's responsibility to organize a meeting to meet with all members. The members should record a resolution to dissolve by voting and recording the minutes of the meeting. The minutes should be preserved in the business records. If the LLC is under one organizer, the organizer is responsible to file the Articles of Dissolution.
What Is a Voluntary Dissolution?
A voluntary dissolution can only be accomplished if all members are in agreement. If all members are not in agreement to dissolve the LLC, it would require a judicial dissolution, which means you will need to bring and win a lawsuit. Another option is to resign from the LLC unless resigning violates the operating agreement.
At dissolution, the LLC will need to ensure all business debts are settled and that all creditors have been notified of the pending LLC dissolution. This is usually accomplished by providing each creditor with a deadline to submit all claims and a mailing address.
What Is Notice of Dissolution?
While not required, an LLC may choose to provide evidence for notification with a publication of Notice of Dissolution. This may help in the event of creditors filing claims against the LLC once the business is dissolved and provides proof of notice to unknown claimants.
In addition, the Secretary of State will not approve dissolution until all taxes and administrative fees owed by the LLC are current and paid in full. The LLC's required periodic reports should be up to date and on file as well. The remaining assets of an LLC may be divided between members according to the member's ownership interest. Remember that any distributions will need to be reported to the IRS on the member's tax return.
In order to protect the LLC from future liability options, all bank accounts opened in relation to the LLC should be closed once the LLC is dissolved.
Do Registration Licenses Require Fiscal Obligations?
Keep in mind, registration license and any seller permits obtained in the state, region, county, or city may require fiscal obligations. These should all be canceled to avoid any penalties or reporting problems after the LLC's dissolution. If your LLC is registered to do business out of state, you will need to file a separate form to cease your right to perform business in those states.
What Forms Are Needed to Dissolve the LLC?
The following forms may be needed to dissolve an LLC. You can contact a business lawyer to determine which forms you need to file.
- Termination of registration
- Certificate of termination of existence
- Application of withdrawal
- Certificate of surrender of the right to transact business
If you do not file the appropriate form, you may be held liable for annual reporting fees and taxes.
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