Key Takeaways:

  • An LLC dissolution form is necessary to officially close an LLC and cease operations.
  • The dissolution process varies by state and may require a certificate of cancellation and final tax filings.
  • You can check whether your LLC is still active or already dissolved by using your state’s Secretary of State (SOS) website or business search tool.
  • Before filing, LLC members must vote on dissolution, cancel licenses and permits, notify relevant stakeholders, and file final tax returns.
  • Checking an LLC’s status is crucial before attempting to dissolve it, especially in states that require the entity to be in good standing.
  • Not all business entities use the same process—nonprofits and cooperative associations have different requirements.

An LLC dissolution form is filed by a Limited Liability Company when its members wish to dissolve the company and no longer conduct business. 

What Is an LLC Dissolution Form?

LLC dissolution forms must be filled out by the members (business owners) of an LLC in order to officially dissolve a business. The process of dissolution can differ slightly depending on the state in which the LLC is formed and registered, but the Secretary of State (SOS) website will have information regarding how to properly shut down a business. 

The state may require a filing or service fee along with the LLC dissolution form when it is filed. 

Check to be sure that the status of your LLC is active in the SOS business search database. An LLC cannot be dissolved if it is not active in some states. 

To check the status of any LLC, head to the SOS website and find the business name search tool. Some websites will direct to another database, separate from the Secretary of State. 

Some states also require the members of an LLC to file some type of cancelation certificate when they dissolve their business. The state of California requires the members to file Form LLC-4/7. 

Before mailing in the forms required in your specific state for cancelation, you'll want to get some legal advice to be sure that the dissolution is being handled properly. This will help to ensure that the liability protection offered by the LLC structure remains intact, even as the company is dissolved. You'll also want to mail any dissolution forms using Certified Mail and request a return receipt to keep track of the forms and be certain that they were received. 

Nonprofit organizations and cooperative association entities should not use a dissolution form, but will be required to follow their own set of rules for closing their companies. 

How to Check if an LLC Is Dissolved

Before filing an LLC dissolution form, it’s important to confirm the status of your LLC. If your business is already dissolved or inactive, some states may reject the dissolution filing or require reinstatement before proceeding.

To check if your LLC is dissolved:

  1. Visit Your Secretary of State's Website: Most states offer an online business entity search tool on the Secretary of State (SOS) website.
  2. Search by Entity Name or Number: Enter your LLC’s legal name or registration number. Some sites allow filtering by active or inactive status.
  3. Review the Status: The search result will typically display whether the LLC is "active," "dissolved," "suspended," "terminated," or "canceled."
  4. Look for Dissolution Filings: If the LLC has already filed articles of dissolution or a certificate of cancellation, that will often be noted in the entity’s public record.
  5. Verify Good Standing: Some states require that your LLC be in good standing with state taxes and filings before you can dissolve it.

If you are unsure how to check if your LLC is dissolved in your specific state, you can contact the state’s business services division or consult with a business attorney for clarification.

How to Dissolve an LLC

If the owners of an LLC decide to dissolve the business, they will need to make sure they complete a few tasks first:

  1. Conduct a meeting with all of the members of the LLC (or a Board of Directors if the LLC has chosen a corporation structure) and put forth a vote on the dissolution of the business.
  2. The decision to dissolve must be approved by a majority of the members or shareholders (depending on the business's structure).
  3. The members need to draft a written agreement and have it signed by all members showing the agreement to dissolve the business.
  4. Finally, a dissolution form may be filed with the state.

The final tax returns for the company must also be filed before an LLC can submit a dissolution form. LLCs must file their business taxes (which will depend on their taxation status chosen with the IRS (Internal Revenue Service), employment taxes, and must pay any owed taxes before dissolving. 

Even if the business plans to dissolve in the middle of a year, the taxes for that year must be reported and filed. When the last tax returns are filed for the company, the member or members handling the reports should be sure to specify that these are the final returns for the company. 

An LLC dissolution form will be filed with the Secretary of State for the state that the business is registered with, but the LLC should be sure that a few important documents are in order before filing:

  • A written document indicating the consent of dissolution by the members of the LLC
  • Status of good standing with the Franchise Tax Board verification letter (this shows that the LLC is caught up with all owed taxes)
  • Tax clearance certificate (also verifies that all company taxes are squared away)

The members of the LLC will also want to make sure that any licenses or permits originally obtained by the LLC in order to properly conduct business have been canceled. Insurance coverages for the business will also need to be canceled and might include:

  • Business liability insurance
  • Worker's compensation insurance
  • Employee health care policies

Any DBAs (Doing Business As) or trade names filed for the LLC should also be canceled once the business is dissolved. 

Before filing for dissolution, the owners of the company will want to make sure they have notified any person who may be affected by the action including:

  • Employees
  • Customers
  • Clients
  • Suppliers
  • Service providers (phone companies, etc.)
  • Banks
  • Landlords

Making sure to tie up any and all loose ends when dissolving an LLC will help to maintain a good reputation and avoid any legal or liability issues down the road.

Additional Steps When Closing a Business

In addition to filing the LLC dissolution form and handling taxes, there are several important wrap-up steps to take:

  • Cancel State and Local Licenses: Any permits, licenses, or registrations obtained for the business—such as a business license, seller’s permit, or zoning permit—should be officially canceled.
  • Close State Tax Accounts: Notify your state’s tax agency that you are ceasing business operations. This includes payroll tax accounts, sales tax accounts, and any industry-specific tax registrations.
  • Handle Final Payroll: If your LLC has employees, you must issue final paychecks, submit final payroll tax filings, and provide employees with W-2s.
  • Close the Employer Identification Number (EIN): The IRS does not cancel EINs, but you should send a letter stating that the business is closed and requesting to close your IRS business account. Include the complete legal name of the entity, EIN, and business address.
  • Resolve Business Debts and Obligations: Pay off any remaining debts, notify creditors, and formally terminate contracts, leases, or service agreements.
  • Distribute Remaining Assets: After paying off liabilities, any remaining assets can be distributed to LLC members in accordance with the operating agreement.

IRS Requirements for Closing an LLC

When dissolving an LLC, it’s essential to comply with IRS requirements to avoid future tax liabilities:

  • File Final Federal Tax Returns: Indicate that the return is final by checking the appropriate box on the form. For example, if taxed as a partnership, file Form 1065 and check the “final return” box.
  • Close Employment Accounts: If you had employees, submit the final Form 941 (Employer’s Quarterly Federal Tax Return) and Form 940 (Annual Federal Unemployment Tax Return).
  • Report Distributions to Members: If assets are distributed to members, ensure this is reported properly on Form K-1 or Form 1099 as applicable.
  • Return or Cancel Business Licenses and EIN (Employer Identification Number): Although the EIN itself cannot be canceled, the IRS can close the associated account. Send a letter to the IRS requesting closure and include your EIN and the reason for closing.

More guidance is available on the IRS website.

Frequently Asked Questions

How can I check if my LLC has been dissolved? Visit your state's Secretary of State website and use the business entity search tool. Search your LLC by name to view its current status, which may be listed as active, dissolved, canceled, or inactive.

What happens if I don’t dissolve my LLC properly? Failure to properly dissolve your LLC may result in continued tax obligations, late fees, and penalties for non-filing. You may also remain personally liable for the business.

Can I dissolve an LLC that is not in good standing? Some states require your LLC to be in good standing—meaning all fees, reports, and taxes are current—before allowing dissolution. You may need to reinstate it first.

Is an LLC automatically dissolved if it stops doing business? No. An LLC must file official dissolution documents with the Secretary of State. Simply ceasing operations does not terminate the legal entity.

Do I need to notify the IRS when closing an LLC? Yes. You must file a final federal tax return and close your business account with the IRS. You should also cancel your EIN by sending a letter to the IRS.

If you need help with an LLC dissolution form, 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, Menlo Ventures, and Airbnb.