To dissolve a limited liability company one has to take up a set of required steps. In Arizona, if you and the members of the LLC want to discontinue business, then it is necessary to dissolve their business legally to avoid any administrative and legal consequences. To dissolve an LLC in Arizona, you are required to submit a complete Article of Dissolution to the Secretary of State. Before submitting the Article of Dissolution, one must follow the operating agreement.
If you have an Arizona LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Arizona LLC is to follow the operating agreement. There are some points to be noted before proceeding with the official paperwork. At first, make sure all the members of the LLC are agreed 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. Here are the steps to address for dissolving Arizona LLC.
On this page, you’ll learn about the following:
How to Dissolve an LLC in Arizona
Dissolution of Arizona LLC requires three broad procedural steps. Having an Arizona LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Arizona Secretary of State.
Step 1: Follow your Arizona LLC Operating Agreement
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 Arizona LLC operating 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.
Get a Professional Agent Service
When it comes to a limited liability company dissolution, it is important to get professional help. The 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 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 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 until the date you have decided for dissolution. All the taxes must be paid in advance so that you don’t face any issues in the further 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 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. If you want to do the accounting yourself or make accounting easy, try FreshBooks.
Tax clearance
While dissolving the Arizona LLC, the owner does not require 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 LLC that are classified as partnerships is form 1065, and those LLC’s who have registered themselves as corporate should check IRS form 1120.
Step 3: File Article 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 an Arizona Certificate of Formation, one has to file an Article of Dissolution. 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 three methods of filing available, i.e. file by mail, fax or online filing. To get the application form you need to visit the Secretary of State Website of Arizona state.
- In that particular SOS website, the LLC owner has to look for the Domestic LLC Articles of Dissolution page.
- There is a form available on this page, which is the article of dissolution you are looking for. You have to download that pdf form and start filling it.
- For the online filing, go to the official portal Arizona Corporation Commission and log in to the portal.
- 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 or fax it and make a payment.
Mail to,
Arizona Corporation Commission – Corporate Filings Section
1300 W. Washington St.
Phoenix, Arizona 85007
Fax: 602-542-4100
Online: Arizona Corporate Commission
Filing Fee: $35
The LLC you owned, 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 that he accepts your expedited dissolutions or not.
Points to Be Noted When Dissolving Arizona LLC
Apart from these three steps, there are some other tasks one has to keep in mind while dissolving an LLC legally.
Winding Up
There are some purposes of LLC that 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 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 cost in Arizona includes 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. Following are the ways to pay for the dissolution.
- You can select a payment pick-up option.
- There is an option of direct account transfer through your prepaid accounts.
- LLC owners can also use their Credit card, providing its complete details and types. Along with that, an original signature is required to authorize the transaction state will make.
After Dissolving Your LLC
After you formally dissolve your LLC, your business name will not be reserved anymore. Any other business entity will be eligible to use your LLC name immediately after 120 days of dissolving your LLC. On the other hand, if you have an Arizona foreign LLC, then you must comply with the SOS of the state after the dissolution of your LLC in Arizona. A registered agent can help you do the needful.
Reasons Behind Dissolving Arizona LLC
There are various reasons why someone would want to dissolve an LLC in Arizona. But the reason will be different for every other company or business. When it comes to an LLC, it is the one that gives limited liability to the owners. But no matter what, it is essential to dissolve an LLC in proper terms of government. Now the question is, why?
- The very first reason is, there can be outstanding bills that will be essential to pay off.
- The company will have to wrap up all outlets as it can lead to legal problems.
- The reason can be that the company’s goal is finished or accomplished.
- A disagreement between the owners of the company can also be a reason.
- If an owner is deceased, it can lead to an involuntary dissolution of the company.
- If someone wants to join the company, it can also lead to the same.
Top Businesses to Look For in Arizona!
If someone plans to start an LLC in Arizona, it will be essential to research it properly. The proper research will get the prospect to some of the sectors that make the most in the GDP. It is all about the state’s economy, and some of the sectors do a lot better. We have given some of the top businesses, so check them out and start one!
- Manufacturing: There are so many things that we get because of the manufacturing sector. So if the industry has a lot to give us, it can impact the economy well too. It has 5.96% of the total workforce, and that is a pretty good number. And if we talk about the output, it turned out to be $29.86 billion every year.
- Mining: When it comes to mining, it can create a perfect opportunity for the people in terms of employment. It eventually creates more than 11,249 jobs annually for the people and contributes to the GDP too. The total output from it was $6.5 billion yearly, and the amount it contributed to GDP was $1.4 billion every year.
- Agriculture: The total of the cash receipts from agriculture was summed to be annually $4.2 billion every year. It is not possible for the economy to stand without the agriculture sector as it is the basic need. It also contributes 1.7% to the GDP of the state every year.
Arizona LLC Dissolution Review
Time needed: 5 minutes
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 detail.
- 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 Dissolution
File the article of dissolution to make it known to the state where your LLC operates is that you are indeed no longer in business.
What is the Cost to Dissolve an LLC in Arizona
To dissolve an LLC in Arizona you need to file the Articles of Termination with the Alaska Corporation Commission and pay a filing fee of $35.
When it comes to running a business, things don’t always go as planned. Sometimes, despite putting in your best efforts, circumstances change and you find yourself needing to dissolve your limited liability company (LLC). From various reasons like financial troubles, changes in personal interest, or pursuing new opportunities, there can be a multitude of factors that lead to the decision of dissolving an LLC. In Arizona, just like in other states, this process comes with its cost implications.
Before making the decision to dissolve an LLC, it is crucial to understand the associated costs involved. You want to be financially prepared and consider all aspects before taking this significant step. The cost to dissolve an LLC in Arizona can vary depending on several factors.
Firstly, it is essential to consider any outstanding debts or liabilities that the LLC may have accrued. Clearing these obligations should be your utmost priority before initiating the dissolution process. This might include paying off remaining debts, severance, or other contractual obligations. Ignoring such costs can result in legal and financial consequences, leaving a negative impact that might affect your personal credit or sully your professional reputation.
Additionally, Arizona requires that a Certificate of Dissolution be filed with the Arizona Corporation Commission (ACC). This certificate ensures the termination of the LLC’s legal existence in the state. Filing fees for the Certificate of Dissolution currently stand at $25 with the ACC. However, these fees are subject to change due to regulations and adjustments by the state authorities. Remember to always verify the up-to-date fees with the ACC or your legal advisor.
Apart from the filing fees, you may also need professional assistance from a legal or tax advisor, especially if your LLC has complicated financial or legal obligations. While hiring professional help incurs additional costs, their expertise is invaluable when it comes to navigating the complexities of dissolving an LLC in compliance with Arizona’s legal requirements. The level of support you require usually depends on the complexity of your LLC’s business operations.
On top of the direct costs associated with dissolution, you must not overlook indirect costs, such as the potential loss of business opportunities or damages to relationships you have built with clients, suppliers, and partners over time. Dissolving an LLC often means the end of a business venture, and while it might be necessary, it’s essential to weigh the opportunity costs and potential future financial implications. These costs are not directly quantifiable, but they should be considered nonetheless.
Finally, remodeling and re-branding expenses can result from the dissolution process, particularly if you decide to start a new business venture. Constructing a new brand identity, developing marketing strategies, or creating another business entity all require financial investment.
In conclusion, the cost to dissolve an LLC in Arizona encompasses both direct and indirect expenses, including unpaid debts, legal fees, filing fees, and potential loss of future business opportunities. It is a significant decision that should not be taken lightly as it can have lasting financial consequences if not carefully executed. Seeking the assistance of professionals knowledgeable about Arizona’s regulations can provide you with a better understanding of the costs involved and help ensure the dissolution process is conducted smoothly and efficiently.
F.A.Qs
Yes, in Arizona, there is a fee of $35 to be paid for filing the Articles of Dissolution. It is a fixed amount paid to the Arizona Secretary of State while dissolving your LLC.
No, there is no requirement of revenue department clearance till the time the SOS of Arizona accepts the dissolution form.
The name will also get deregistered with the dissolution of the LLC. But the name will not be allotted for the next 120 days. After that, if some business wants to name their LLC after the name chosen by you, then it is their choice.
If you have not dissolved your LLC, you are liable for business privilege tax, and if it is not paid on time, you are leveraged with 10% of the amount of tax or $50. After that, the additional penalties will increase by $1 per month. If it goes unpaid for a longer duration, then your property or personal assets can be seized to recover the outstanding tax.
Yes, if you are dissolving your LLC, you have to pay some amount to the probate judge who was also present during your LLC formation in the probate office. The minimum fee of the judge is $50, which can vary.
In Conclusion
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. Get a professional service to get everything done. We hope this article helps you to close your LLC in Arizona. If you have any query do let us know in the comment box.
