How to Dissolve an LLC in Arizona

Dissolving a business often involves complex procedures. However, for a limited liability company in Arizona, dissolving it takes a handful of paperwork. When an LLC is formed in Arizona, the owner(s) draft the operating agreement. If the owner(s) decide to dissolve the business, the dissolution takes place following the articles mentioned in the operating agreement.

In this article, LLCBuddy editors shared the ins and outs of dissolving an LLC in Arizona. LLCs must file the Articles of Dissolution with the Arizona Secretary of State like the formation certificate was filed at the time of forming an LLC in Arizona. It takes a few days to process and a handful of fees to be paid to the SOS. Many people hire a professional service to do the paperwork to process it hassle-free.

At the time of forming an LLC, an operating agreement draft must be written. Generally, the process of dissolution takes place following the operating agreement (read: Arizona LLC operating agreement). Before the dissolution process, there are a few things to consider in the LLC.

First, make sure all the members of the LLC agree to dissolve the business. Once all the members are ready, their consent should be recorded via voting. After casting their vote in favor of the dissolution, the legal process must be started.

Dissolution of Arizona LLC requires three broad procedural steps. Having a Arizona LLC Operating Agreement, closing all the tax accounts, and finally submitting the Articles of Dissolution form to the Arizona Secretary of State.

Step 1: Follow the LLC Operating Agreement in Arizona

When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. There is also a dissolution process, which is added to your agreement. The common dissolution steps that almost every LLC follows are:-

First of all, the dissolution vote will take place among the LLC members in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.

All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
After that, a formal date for dissolving the LLC will be decided.
The next step is counting the LLC assets and dividing them among the stakeholders and members accordingly.
Finally, the creditors of the business are notified, and the debts of the business are settled.

This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminating an LLC in Arizona.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. Arizona registered agent will guide you with everything you need to close your limited liability company. While choosing a registered agent make sure they have a physical street address in the state. A professional service provider helps you to file the Article of Dissolution and close your various tax accounts without any hassle. Below are the best LLC services in Arizona that we strongly recommend for you.

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Step 2: Close All Tax Accounts

Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts, especially business entity tax accounts, are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.

You must contact all government entities and clear the amount of outstanding taxes due by the date you have decided to dissolve. All the taxes must be paid in advance so that you don’t face any issues in the process of shutting down your LLC.

Some of the common taxes that limited liability companies have to pay are:

Unemployment insurance tax
Employee withholding tax if your LLC has employees.
If your LLC is engaged in selling taxable goods then they are liable to pay the sales and use tax.

Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close their accounts. Apart from business taxes, federal taxes, personal income taxes, and franchise taxes are to be considered. For the franchise taxes, a franchise tax form is required. That is why the LLC owner should go through the sales tax guide and hire an accounting service.

Tax clearance

While dissolving the Arizona LLC, the owner is not required to obtain a tax clearance certificate. However, if you have filed federal taxes, then you must go through the final return option on your IRS form.

The IRS form for the LLCs that are classified as partnerships is Form 1065, and those LLCs who have registered themselves as corporate should check IRS Form 1120.

BOI Reporting

If you’re going to dissolve your LLC this year, make sure to update your BOI reporting. From January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) implied a rule to all businesses, including LLCs in Arizona to file the BOI Report. The Beneficial Ownership Information (BOI) in Arizona is a report that states about in and out of the company. This report must be up-to-date and submitted to the FinCEN before you proceed to the dissolution.

Step 3: File Articles of Dissolution

There is a list of dissolution documents that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. Like a Arizona Articles of Organization, one has to file Arizona LLC Articles of Organization. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.

First of all, the LLC owner(s) has to file the Article of Dissolution. There are multiple methods of filing available, such as filing by mail, in-person drop, or/and online filing.
You can follow the filing instructions on the official portal so that the steps for dissolution will be easier to complete.
For offline filing, LLCs must download the form and submit it to the Arizona Secretary of State physical office along with the state filing fee.
If you want to dissolve Arizona Foreign LLC then look for the Foreign LLC Dissolution process.
You must fill in all the important and legal information in the form, so you should be extra careful.
After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution filing fees.
After filling in every detail, one should submit the form through an official mail address and make a payment.

Filing	Forms and Details
Online Applications	Sign-in
Offline Applications	Articles of Dissolution
SOS Contact (if offline application is available)	Arizona Corporation Commission, Corporate Filings Section, 1300 W. Washington St., Phoenix, AZ 85007
Filing Time	Several weeks or months based on the LLC.
Filing Fee	$35

The LLC you own is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call whether he accepts your expedited dissolutions or not.

Points to Be Noted When Dissolving an LLC in Arizona

Apart from these three steps, no major dissolution rules are there in Arizona. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.

Winding Up

Some purposes of LLC require some attention even after dissolution, known as winding up. The task of winding up includes.

For a certain period, the property of a business requires preservation.
If there is any civil case against the LLC, then the owner needs to finish them.
Settle all the existing disputes of LLC.
Transfer all the property of the LLC to the names of partners.
Release all the liabilities that the LLC owes to others.
Rightful distribution of all the assets among members, according to their percentage of partnerships.

Cost of Dissolving LLC

LLC costs in Arizona include the formation as well as dissolution fees. To dissolve an LLC in Arizona, LLCs have to file an Article of Dissolution. The filing fee is $35. The details are mentioned in the articles of dissolution filing form. Following are the ways to pay for the dissolution,

You can select a payment pick-up option.
There is an option for direct account transfer through your prepaid accounts.
LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction the state will make.

After Dissolving Your LLC

After you dissolve an LLC in Arizona, you can reinstate or revive the same within a given time. In Arizona, the LLC name will be available up to 6 months. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in Arizona if that is available. According to the Arizona SOS, you can revive your LLC within 6 years.

Reasons Behind Dissolving an LLC in Arizona

People always think they can leave the company without any notice and there will be no issue. But if you have an LLC that you created with a legal obligation, it needs to be ended that way. Yes, if someone will dissolve an LLC in Arizona, they will have to do it while taking care of the government. For dissolving the company, there is always a reason. The reason can be voluntary or involuntary too. Let’s get to know about the involuntary reasons,

If the company was caught doing illegal business.
If the company’s member died due to some reason or went bankrupt.
The dissolution will be mandatory if the assets of the business are used unwisely.
If the time being of the company was already determined in the will, then the company will go into dissolution at that time.

Top Businesses in Arizona

With the population of 7,379,346, Arizona is one of the favorable places to start an LLC. According to several reports, starting an LLC for Travel Agency can be profitable as various places in the state showed steady growth in this business over the past few years. On the other side, based on the city or region you’re going to start your LLC, you can decide the type of business to start. Following are the top 5 businesses you can start in Arizona.

Travel Agency
Arts and Crafts
Financial Planning
Courier
Insurance Sales

Arizona LLC Dissolution Review – A Quick Recap

Here’s a recap of the steps you must follow when dissolving your Arizona LLC. Click on the steps in this list if you want to read the full details.

Follow Your Arizona LLC Operating Agreement: Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
Close All Tax Accounts: Make sure you close all your tax accounts to avoid incurring further costs.
File Articles of Organization: File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.

FAQs

What are the steps involved in dissolving an LLC in Arizona?

The first step is to obtain the consent of all members to dissolve the LLC. Then, you must file articles of dissolution with the Arizona Corporation Commission.

How much does it cost to dissolve an LLC in Arizona?

The filing fee for articles of dissolution with the Arizona Corporation Commission is $35.

Is there a waiting period after filing articles of dissolution in Arizona?

After filing articles of dissolution in Arizona, the LLC must publish a notice of dissolution in a newspaper for three consecutive weeks.

Are there any tax implications when dissolving an LLC in Arizona?

Yes, there may be state and federal tax implications when dissolving an LLC in Arizona. It is advisable to consult with a tax professional.

Can a dissolved LLC in Arizona be reinstated?

Yes, a dissolved LLC in Arizona can be reinstated by filing an application for reinstatement with the Arizona Corporation Commission.

What happens to the assets of a dissolved LLC in Arizona?

The assets of a dissolved LLC in Arizona must be distributed to the creditors and members in accordance with the operating agreement.

Is there a specific form for filing articles of dissolution in Arizona?

Yes, the Arizona Corporation Commission provides a specific form for filing articles of dissolution, which must be completed and submitted.

How long does it take to dissolve an LLC in Arizona?

The timeline for dissolving an LLC in Arizona can vary, but it usually takes a few weeks to complete the process.

Can creditors come after the members of a dissolved LLC in Arizona?

In some cases, creditors may be able to pursue the members of a dissolved LLC in Arizona for outstanding debts.

What is the penalty for failing to properly dissolve an LLC in Arizona?

Failing to properly dissolve an LLC in Arizona can result in fines and penalties imposed by the Arizona Corporation Commission.

Can an LLC in Arizona be dissolved if it has outstanding debts?

Yes, an LLC in Arizona can be dissolved even if it has outstanding debts. The debts must be settled as part of the dissolution process.

What happens to a dissolved LLC’s name in Arizona?

Once an LLC is dissolved in Arizona, its name becomes available for use by another entity.

Can I dissolve my Arizona LLC online?

Yes, you can submit the necessary paperwork to dissolve your Arizona LLC online through the Arizona Corporation Commission’s website.

Do I need to notify the state of Arizona when dissolving my LLC?

Yes, you must notify the Arizona Corporation Commission when dissolving your LLC by filing articles of dissolution.

Can I dissolve my Arizona LLC without the consent of all members?

No, the consent of all members is required to dissolve an LLC in Arizona.

What information do I need to provide when filing articles of dissolution in Arizona?

When filing articles of dissolution in Arizona, you will need to provide the name of the LLC, the date of dissolution, and the reason for dissolution.

Is there a specific deadline for filing articles of dissolution in Arizona?

There is no specific deadline for filing articles of dissolution in Arizona, but it is recommended to do so as soon as possible after the decision to dissolve the LLC is made.

Can I dissolve my Arizona LLC if it is involved in legal proceedings?

It is possible to dissolve an Arizona LLC that is involved in legal proceedings, but legal guidance is recommended to handle any ongoing issues.

What are the implications of dissolving an Arizona LLC for its employees?

When an Arizona LLC is dissolved, its employees may need to be laid off or transferred to a new entity, depending on the circumstances.

Can I sell the assets of my Arizona LLC before dissolving it?

Yes, you can sell the assets of your Arizona LLC before dissolving it, but the proceeds must be distributed in accordance with the operating agreement.

Do I need to file final tax returns for an Arizona LLC before dissolving it?

Yes, final tax returns must be filed for an Arizona LLC before it can be dissolved.

Can I dissolve my Arizona LLC without notifying the members?

No, the members of an Arizona LLC must be notified and provide consent to dissolve the LLC.

Can I transfer ownership of my Arizona LLC to another entity instead of dissolving it?

Yes, ownership of an Arizona LLC can be transferred to another entity through a merger or acquisition, rather than dissolving the LLC.

What is the difference between dissolving an Arizona LLC and canceling its registration?

Dissolving an Arizona LLC involves the formal process of ending the entity’s existence, while canceling its registration simply removes it from the state’s records.

Can I reinstate a dissolved Arizona LLC at a later date?

Yes, a dissolved Arizona LLC can be reinstated by filing an application for reinstatement with the Arizona Corporation Commission.

How can I ensure that all business debts and obligations are settled before dissolving my Arizona LLC?

It is important to conduct a thorough review of the LLC’s financial records and assets to ensure that all debts and obligations are settled before dissolving the entity.

Are there any restrictions on dissolving an Arizona LLC if it has pending contracts or agreements?

If an Arizona LLC has pending contracts or agreements, they must be properly addressed and settled before the entity can be dissolved.

Are there any specific requirements for dissolving an Arizona LLC with foreign qualifications?

If an Arizona LLC holds foreign qualifications in other states, additional steps may be required to properly dissolve the entity in those jurisdictions.

Can I dissolve my Arizona LLC if it is in good standing with the state?

Yes, you can dissolve an Arizona LLC that is in good standing with the state by following the proper dissolution procedures with the Arizona Corporation Commission.

How do I dissolve an LLC in Arizona?

To dissolve an LLC in Arizona, you must file Articles of Dissolution with the Arizona Corporation Commission.

In Conclusion

Dissolving a business is not an easy task as a lot of homework is involved with the process. The official process might have only a few steps, however, before and after dissolving the LLC, there might be a lot of other tasks. In this case, it is highly recommended to get a professional service. If you are looking to file an LLC at $0, then ZenBusiness is your answer.

Limited liability companies reduce owners’ personal liability. Having an LLC is quite cost-effective. However, if it is required to close down the business, then the dissolution process should be done legally. This article shared the general steps. Let us know if you have any queries.