To dissolve a limited liability company one has to take up a set of required steps. In Arkansas, 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 Arkansas, 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 Arkansas LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Arkansas 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 Arkansas LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Arkansas
- After Dissolving Your LLC
- Reasons Behind Dissolving Arkansas LLC?
- Arkansas LLC Dissolution Review
How to Dissolve an LLC in Arkansas
Dissolution of Arkansas LLC requires three broad procedural steps. Having an Arkansas LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Arkansas Secretary of State.
Step 1: Follow Your Arkansas 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 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.
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.
While dissolving the Arkansas 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 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. 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 is only one method of filing available, i.e. file by mail. To get the application form you need to visit the Secretary of State Website of Arkansas 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.
- With the Article of Dissolution, one has to send the Memorandum or final report form at the same time. This is an annual franchise tax report. The tax to be paid is $150 for the Memorandum.
- 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.
Arkansas Secretary of State
Business and commercial service
1401 West Capitol, Suite 250
Little Rock, AR 72201
Filing Fee: $50
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 Arkansas LLC
Apart from these three steps, there are some other tasks one has to keep in mind while dissolving an LLC legally.
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 Arkansas includes the formation as well as dissolution fees. To dissolve an LLC in Arkansas, LLCs have to file an Article of Dissolution. The filing fee is $50. At the same time, LLC owners have to submit a Memorandum (Final Report) that costs $150. The Memorandum has to be submitted to Arkansas SOS. The details are mentioned on the second page of the article dissolution filing form. 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 cards, providing their 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 Arkansas LLC name after 120 days of dissolving your LLC. On the other hand, if you have a foreign LLC in other states, then you must comply with the SOS of the state after the dissolution of your LLC in Arkansas. A registered agent can help you do the needful.
Reasons Behind Dissolving Arkansas LLC?
People often think that if they want to shut down an LLC in Arkansas, they can close the gates. No, that is not an adequate practice. Want to know why? Read the following points.
- If business owners are not closing or dissolving their company properly, they can get into any legal issues.
- It is the same as an outstanding bill; if business owners are holding a business, they are entitled to pay taxes. So if they don’t dissolve their company properly, they will have to pay the taxes.
- It can lead to other problems like lawsuits against the owners of operations that are not legal.
- The business assets can lose value by the time owners realize that it is crucial to dissolve the company.
Top Businesses to Look For in Arkansas!
If you want to start an Arkansas LLC that gives out the best cash inflow, you have to ensure the economic aspects. The research about this will ensure that there will be no need to dissolve an LLC in Arkansas. Some sectors make the most contribution to the GDP of Arkansas. Those industries are the ones that provide us with the top businesses.
- Agriculture: In Arkansas, Agriculture is the topmost business among all. With an annual contribution of $16 Billion to the state’s GDP, the Agriculture sector produces the largest rice exports every year.
- Healthcare: Healthcare is one of the top 5 businesses in Arkansas. The summed-up amount of the output was $11.18 billion annually, which stands moderately high compared to all sectors.
- Transportation and warehousing: It is not like any state doesn’t need the services of transports or warehouses. With the help of this sector, the state made a whole $4.5 billion every year on its own.
- Finance: People need to get as much help as they can get in finance. In Arkansas, the finance sector is much bigger compare to other similar states. Every year more than thousands of employment gets created in this industry.
Arkansas LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Arkansas LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Arkansas 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 Arkansas
To dissolve an LLC in Arkansas you need to file the Articles of Dissolution with the Arkansas Secretary of State by mail and pay a filing fee of $50.
An LLC or Limited Liability Company is a business structure that offers limited liability protection to its owners, or members. This type of business structure is popular in the United States, and Arkansas is no exception. Dissolving an LLC in Arkansas, however, is not a free process. The cost to dissolve an LLC in Arkansas depends largely on the type of dissolution process you choose, and the number of members you have.
If you have an LLC in Arkansas, you have two options for dissolution: administrative dissolution and judicial dissolution. Administrative dissolution is the simplest and least expensive option. It requires filing an application with the Arkansas Secretary of State and paying a $35 filing fee. This is a straightforward process that can be completed in one to two weeks.
The other option is judicial dissolution. Judicial dissolution is a more complicated process, and it involves filing a petition with the court. The petition must include the reason for dissolution, the names and addresses of the members and managers, and the names of the LLC’s creditors. Additionally, you may also be required to provide a copy of the LLC’s Articles of Organization, operating agreement, and financial statements. The cost of judicial dissolution in Arkansas varies depending on the complexity of the case and the court’s filing fees. Generally, however, the cost is higher than with administrative dissolution.
In addition to the cost of dissolution, Arkansas also requires LLCs to pay a $50 annual franchise tax. This fee is due every year and must be paid regardless of whether or not the LLC is active or dissolved. If you choose to dissolve your LLC, you must still pay the annual franchise tax for the year in which you dissolved the LLC.
The cost to dissolve an LLC in Arkansas is generally not very high, but it does depend on the type of dissolution process you choose and the number of members you have. Generally, administrative dissolution is the least expensive option, and judicial dissolution is more costly. Additionally, you must also pay a $50 annual franchise tax regardless of whether or not your LLC is active or dissolved. By understanding the cost of dissolving an LLC in Arkansas, you can make an informed decision about the best course of action for your business.
Yes, in Arkansas, there is a fee of $50 to be paid for filing the Articles of Dissolution. Also, there is a fee of $150 to be paid for the Final Report that is to be submitted to the Arkansas SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Arkansas 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.
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 Arkansas. If you have any query do let us know in the comment box.