Key Takeaways

  • Dissolving an LLC or corporation in Nevada requires formal filing with the Secretary of State.
  • For LLCs, the required form is the Certificate of Dissolution, while corporations use the Certificate of Dissolution or Certificate of Termination depending on the status of the business.
  • Corporations and LLCs must settle debts, distribute assets, and close tax accounts before dissolution.
  • Additional requirements may include business license cancellations and notifying creditors.
  • Creditors have up to two years to file claims against dissolved Nevada entities.
  • Filing fees and expedited service options are available through the Nevada Secretary of State.
  • It is important to comply with both state and federal tax filing obligations when closing a business.

The Nevada dissolution of corporation process is an official step to dissolve a corporation according to the provisions outlined in the state's statute regarding the closure of a corporation.

Dissolving a Nevada Corporation

A corporation is an independent entity with a perpetual life. Even if the shareholders do not use the corporation any longer to conduct business, it will still exist as a legal entity and accrue tax obligations. To dissolve a Nevada corporation, certain steps must be followed:

  1. When a for-profit corporation is being dissolved before it has started operations, a majority vote of the incorporators or directors is required by law. If the for-profit corporation has begun operating as a business, a majority vote by the directors to dissolve the corporation is required by law along with a resolution to present to the shareholders. The resolution will indicate the board of director's vote to dissolve along with the signature of the president of the board. If the corporation is a nonprofit entity, the law also requires a majority vote by the board of directors.
  2. Call a meeting of the shareholders of a for-profit corporation that has been conducting business and present the resolution crafted by the board regarding the dissolution of the corporation for a vote. The law requires that there must a majority of the shareholders consenting to the dissolution. Once the vote is taken, the shareholder vote should be recorded in the meeting minutes. The minutes should then be filed in the corporate records book.
  3. File a Certificate of Dissolution with the Nevada Secretary of State's office. At the Secretary of State website, you can download the appropriate certificate to fill out. Several things are needed on the form: certification that the dissolution is authorized; an effective date for the dissolution; the names and addresses of the responsible parties; signatures. The filing fee must accompany the form. At this point, a corporation that has not yet begun conducting business and is filing a certificate is a dissolved Nevada corporation.
  4. Appoint a manager to clear up and conclude any outstanding financial affairs of the corporation, which includes paying any debts, obligations, loans to the corporation by shareholders, and outstanding payroll and state sales tax. Money should be put aside to cover any contingent liabilities, such as pending lawsuits, that the corporation is already aware of or suspects will come to fruition once the entity shuts down.
  5. The assets of the for-profit corporation will be liquidated and any excess capital that is not allocated to pay obligations dispersed to the shareholders in proportion to their ownership interests. Appoint a trustee whose job will be the management of the account holding the reserve funds for contingent liabilities. In Nevada, a creditor has two years to file a claim. After two years have elapsed, the remaining assets in the reserve account can be distributed to the shareholders. At this point, a for-profit corporation that has been conducting business in Nevada is deemed dissolved.
  6. Arrangements must be made for another nonprofit corporation to accept the assets of the Nevada nonprofit corporation or a corporation sole that is being dissolved. Since a nonprofit corporation has no shareholders, legally, the nonprofit's assets must be transferred to another tax-exempt (nonprofit) corporation. The board must approve the nonprofit accepting the assets as it cannot in any way be conflicted with anyone who is involved with the nonprofit that is being dissolved. When arrangements have been made and approved by the board, at this point, a Nevada nonprofit corporation or corporation sole is considered dissolved.
  7. Final federal and state income tax returns must be filed for for-profit corporations or an information return is filed for nonprofit corporations. Pay any outstanding taxes. When filing, check the box that notes "final return." When the return is filed along with the box checked, it closes the corporation's tax account with state and federal governments.

There is also a customer order form to fill out. This provides information to the Secretary of State such as:

  • The name and address of the person who is to receive copies of the dissolution documents.
  • The method of delivery of the documents, which can be by mail, FedEx fax, or email.
  • The method of payment for the copies of the documents.
  • The agency charges $30 for a certified copy. Two-hour service runs $500 and one-hour service is $1,000.

What Happens After Dissolution? Post-Dissolution Responsibilities

Once the dissolution process is complete, there are additional responsibilities that business owners must address to fully close the entity:

  • Retain Records:
    • Maintain dissolution documents, meeting minutes, tax filings, and creditor notifications for several years in case of audits or legal inquiries.
  • Creditor Claims Window:
    • Be aware that creditors can submit claims for up to two years after the date of dissolution.
  • Asset Distribution Documentation:
    • Keep records of how assets were distributed among shareholders or members.
  • Final Compliance Check:
    • Confirm that all tax accounts are closed, including federal EIN deactivation if applicable.
    • Check that business name registrations (including DBAs) have been canceled if no longer needed.

Canceling Business Licenses and Permits in Nevada

When dissolving an LLC or corporation in Nevada, it’s important to cancel any active business licenses to avoid additional fees and penalties. Here’s how:

  • Nevada State Business License:
    • File a Notice of Business Closure with the Nevada Department of Taxation.
    • Cancel your Nevada state business license through SilverFlume.
  • Local Business Licenses:
    • Contact the county or city where your business was registered to ensure local licenses and permits are canceled properly.
  • Sales and Use Tax Permits:
    • Submit a final sales tax return to the Nevada Department of Taxation.
    • Request closure of your tax accounts.

Failure to cancel licenses may result in ongoing tax obligations or penalties, even after your business is dissolved.

Steps to Dissolve an LLC in Nevada

If you are wondering how to dissolve an LLC in Nevada, follow these essential steps to complete the process properly:

  1. Member Approval for Dissolution:
    • Review your LLC’s Operating Agreement for specific dissolution procedures.
    • Secure consent from the members as outlined in the agreement or by state law if no agreement exists.
  2. File the Articles of Dissolution:
    • Complete and submit the Certificate of Dissolution (for LLCs that have not conducted business) or the Certificate of Termination (for LLCs that have conducted business) to the Nevada Secretary of State.
    • You can file online through SilverFlume (Nevada’s business portal), by mail, fax, or in person.
  3. Pay the Required Fees:
    • The standard filing fee is $100.
    • Expedited processing is available: $125 for 24-hour service, $500 for two-hour service, and $1,000 for one-hour service.
  4. Settle Debts and Distribute Assets:
    • Pay off outstanding debts and obligations.
    • Allocate remaining assets among members according to their ownership interests.
  5. Cancel State Business Licenses and Permits:
    • Contact the Nevada Department of Taxation and any local licensing agencies to terminate business licenses.
    • Notify the IRS and file final federal and state tax returns.
  6. Notify Creditors and Resolve Claims:
    • Inform known creditors of the dissolution.
    • Nevada law provides creditors up to two years to bring claims against the dissolved LLC.

Understanding the Difference Between Voluntary and Involuntary Dissolution

In Nevada, dissolution of a business entity can be either voluntary or involuntary:

  • Voluntary Dissolution: Initiated by the LLC members or corporate shareholders/directors when they decide to cease operations. This process includes adopting a resolution to dissolve and filing the appropriate dissolution documents with the Secretary of State.
  • Involuntary Dissolution: May occur when the state administratively revokes the company’s charter due to failure to comply with legal requirements, such as not filing annual lists or failing to maintain a registered agent.

Voluntary dissolution allows business owners to control the closure process and ensure proper distribution of assets and resolution of liabilities.

Frequently Asked Questions

  1. What forms are required to dissolve an LLC in Nevada?
    To dissolve an LLC in Nevada, you must file either the Certificate of Dissolution (if the LLC never conducted business) or the Certificate of Termination (if the LLC operated).
  2. How long does it take to dissolve an LLC in Nevada?
    Processing times vary depending on whether you select standard or expedited service. Expedited options range from 24 hours to as fast as one hour with additional fees.
  3. Can creditors file claims after the LLC is dissolved?
    Yes, creditors generally have up to two years to file claims against a dissolved Nevada LLC or corporation.
  4. Do I need to cancel my Nevada business license separately?
    Yes, dissolving your entity does not automatically cancel your state business license. You must separately notify the Nevada Department of Taxation and close your business license through SilverFlume.
  5. What happens if I don't file for dissolution in Nevada?
    If you fail to officially dissolve your Nevada LLC or corporation, the business will continue to accrue annual fees and may face penalties, even if you are no longer operating.

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