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How to dissolve an LLC, step by step
- Vote to dissolve. Follow your operating agreement (or your state’s default rules) and record the members’ decision in writing.
- Wind up the business. Finish or transfer contracts, collect receivables, sell or distribute assets, and notify creditors, customers and employees.
- Pay debts and taxes. Settle known debts and file final state tax returns. Some states (Texas, for example) require a tax clearance certificate before they accept the dissolution.
- File the dissolution document with the state. Articles of Dissolution, Certificate of Cancellation or Certificate of Termination, depending on the state.
- File final federal returns. Mark the final Form 1065, 1120-S or 1120 as final; single-member LLCs report the final year on the owner’s return.
- Close accounts and registrations. Close the business bank account, cancel licenses, payroll accounts and DBA registrations, and stop your registered agent service.
Dissolution filing and fee by state
| State | Document | State fee | Taxes first? |
|---|---|---|---|
| Wyoming | Articles of Dissolution | $60 | No state tax clearance step published by the Secretary of State. |
| Texas | Certificate of Termination (Form 651) | $40 | Required: file all franchise tax and Public Information Reports, pay all tax, then request a tax clearance certificate from the Comptroller. |
| Delaware | Certificate of Cancellation | $220 plus any unpaid annual taxes | Annual taxes must be paid to cancel; failing to formally close leads to penalties and interest. |
| California | Certificate of Dissolution (LLC-3) / Certificate of Cancellation (LLC-4/7) / Short Form Cancellation (LLC-4/8) | No fee | No SOS tax-clearance step, but the $800 annual tax keeps accruing until the LLC is cancelled; the FTB offers a separate abatement route. |
| North Carolina | Articles of Dissolution (Form L-07) | $30 | No tax clearance stated by the Secretary of State; check with the NC Department of Revenue. |
| New York | Articles of Dissolution | $60 | No tax clearance stated by the Department of State. |
| Georgia | Certificate of Termination | No fee online ($10 service charge on paper) | The LLC must be current on all annual registrations and fees before the Secretary of State accepts a termination. |
| Michigan | Certificate of Dissolution (Form CSCL/CD-731) | $10 | Request a tax clearance from the Michigan Department of Treasury within 60 days of filing the dissolution. |
Costly mistakes
- Letting the LLC lapse instead of dissolving — annual taxes like California’s $800 keep accruing.
- Distributing money to members before paying creditors.
- Forgetting the final federal and state returns.
- Leaving the registered agent, licenses or payroll accounts open.
Frequently asked questions
How much does it cost to dissolve an LLC?
State fees range from $0 in California (and Georgia when filed online) to $220 in Delaware (plus any unpaid annual taxes) among the states we cover; Michigan charges $10. Texas charges $40 but requires a tax clearance certificate first.
What happens if I just stop filing and walk away?
The state eventually dissolves the LLC administratively — but fees, taxes and penalties may keep accruing until then. In Delaware, failing to formally close leads to penalties and interest; in California the $800 annual tax continues until the LLC is cancelled.
Do I need to file a final tax return?
Yes. Multi-member LLCs file a final Form 1065 (checking “final return”), S corps a final Form 1120-S, and single-member LLCs report the final year on the owner’s return. File final state returns too.
Can I reopen a dissolved LLC?
If the state dissolved it administratively, most states allow reinstatement by filing overdue reports and paying fees. A voluntary dissolution is usually final — you’d form a new LLC.
What’s the difference between dissolution and cancellation?
Some states use two steps: dissolution starts the winding-up, and a certificate of cancellation (or termination) ends the LLC’s existence. Others combine them in one filing.
Your LLC setup checklist
- Get a free EINFrom the IRS, in minutes online.
- Open a business bank accountKeep LLC money apart from yours to protect the liability shield.
- Sign an operating agreementSettle who owns and decides what before it matters.
- Get business insuranceCover what the LLC itself doesn’t protect.
- Plan your taxesKnow your tax status and federal due dates.
- Track state deadlinesFree reminders before each filing.
Everything in one list: printable LLC compliance checklist · live deadline calendar.