How to Dissolve an LLC in Colorado

Dissolving a business often involves complex procedures. However, for a limited liability company in Colorado, dissolving it takes a handful of paperwork. When an LLC is formed in Colorado, 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 Colorado. LLCs must file the Articles of Dissolution with the Colorado Secretary of State like the formation certificate was filed at the time of forming an LLC in Colorado. 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: Colorado 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 Colorado LLC requires three broad procedural steps. Having a Colorado LLC Operating Agreement, closing all the tax accounts, and finally submitting the Articles of Dissolution form to the Colorado Secretary of State.

Step 1: Follow the LLC Operating Agreement in Colorado

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 Colorado.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. Colorado 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 Colorado 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 Colorado 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 Colorado to file the BOI Report. The Beneficial Ownership Information (BOI) in Colorado 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 Colorado Articles of Organization, one has to file Colorado 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 Colorado Secretary of State physical office along with the state filing fee.
If you want to dissolve Colorado 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	Articles of Dissolution
Offline Applications	Not Applicable
SOS Contact (if offline application is available)	1700 Broadway, Suite 550, Denver, CO 80290
Filing Time	Within a day if filed online.
Filing Fee	$10

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 Colorado

Apart from these three steps, no major dissolution rules are there in Colorado. 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 Colorado include the formation as well as dissolution fees. To dissolve an LLC in Colorado, LLCs have to file an Article of Dissolution. The filing fee is $10. 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 Colorado, you can reinstate or revive the same within a given time. In Colorado, the LLC name will be available up to 400 days. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in Colorado if that is available. According to the Colorado SOS, you can revive your LLC anytime as there is no time limit for reinstatement.

Reasons Behind Dissolving an LLC in Colorado

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 Colorado, 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 Colorado

With the population of 5,997,070, Colorado is one of the favorable places to start an LLC. According to several reports, starting an LLC for Professional, Scientific, and Technology Services 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 Colorado.

Professional, Scientific, and Technology Services
Real Estate, Rental, and Leasing
Construction
Retail
Health Care and Social Assistance

Colorado LLC Dissolution Review – A Quick Recap

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

Follow Your Colorado 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

How do I dissolve an LLC in Colorado?

To dissolve an LLC in Colorado, you must file Articles of Dissolution with the Colorado Secretary of State.

Are there any specific requirements for dissolving an LLC in Colorado?

Yes, in Colorado, you must ensure that all taxes and debts are paid before dissolving the LLC.

What is the filing fee for dissolving an LLC in Colorado?

The filing fee for dissolving an LLC in Colorado is $25.

Is there a specific form I need to use to dissolve an LLC in Colorado?

Yes, you need to use Form CD 233 to dissolve an LLC in Colorado.

How long does the dissolution process take in Colorado?

The dissolution process typically takes around 1-2 weeks in Colorado.

Can I expedite the dissolution process in Colorado?

Yes, you can expedite the dissolution process by paying an additional fee for expedited processing.

Do I need to notify creditors before dissolving an LLC in Colorado?

Yes, you must provide notice to known creditors before dissolving an LLC in Colorado.

What happens to any remaining assets of the LLC after dissolution in Colorado?

After dissolution in Colorado, any remaining assets of the LLC will be distributed to the members.

Can I reinstate a dissolved LLC in Colorado?

Yes, you can reinstate a dissolved LLC in Colorado by filing an Application for Reinstatement.

What is the deadline for filing taxes after dissolving an LLC in Colorado?

After dissolving an LLC in Colorado, you must file a final tax return within 120 days.

Can I dissolve an LLC that is still in debt in Colorado?

Yes, you can dissolve an LLC that is still in debt in Colorado, but you must ensure that all debts are paid.

Do I need to notify the Colorado Department of Revenue when dissolving an LLC?

Yes, you must notify the Colorado Department of Revenue when dissolving an LLC.

Can I dissolve an LLC in Colorado if it is involved in ongoing litigation?

Yes, you can dissolve an LLC in Colorado even if it is involved in ongoing litigation, but you must provide notice to all parties involved.

Will dissolving an LLC in Colorado affect my personal liability?

Dissolving an LLC in Colorado will not automatically eliminate your personal liability.

Can I dissolve an LLC in Colorado if it is still making a profit?

Yes, you can dissolve an LLC in Colorado even if it is still making a profit, but you must ensure that all profits are distributed to the members.

Are there any specific requirements for notifying employees when dissolving an LLC in Colorado?

Yes, in Colorado, you must provide notice to employees when dissolving an LLC.

Can a dissolved LLC in Colorado be reinstated after a certain period of time?

Yes, a dissolved LLC in Colorado can be reinstated within a certain period of time by filing for reinstatement.

Do I need to cancel my LLC’s business licenses and permits when dissolving in Colorado?

Yes, you must cancel your LLC’s business licenses and permits when dissolving in Colorado.

Can I dissolve my LLC in Colorado if it has outstanding loans?

Yes, you can dissolve your LLC in Colorado even if it has outstanding loans, but you must satisfy those loans before dissolution.

What happens to the LLC’s EIN after dissolution in Colorado?

The LLC’s EIN is no longer valid after dissolution in Colorado.

Can I transfer the dissolved LLC’s EIN to a new entity in Colorado?

No, you cannot transfer the dissolved LLC’s EIN to a new entity in Colorado.

Can I transfer the dissolved LLC’s name to a new entity in Colorado?

No, you cannot transfer the dissolved LLC’s name to a new entity in Colorado.

Can I dissolve my foreign LLC in Colorado?

Yes, you can dissolve your foreign LLC in Colorado by filing a Certificate of Withdrawal.

Do I need a Certificate of Good Standing to dissolve my LLC in Colorado?

No, a Certificate of Good Standing is not required to dissolve an LLC in Colorado.

Can I dissolve an LLC in Colorado if it is no longer operating?

Yes, you can dissolve an LLC in Colorado if it is no longer operating, but you must still follow the proper dissolution procedures.

Can I dissolve an LLC in Colorado if it has no assets or liabilities?

Yes, you can dissolve an LLC in Colorado if it has no assets or liabilities, but you must still file Articles of Dissolution with the Secretary of State.

Can I change my mind about dissolving my LLC in Colorado after I have already started the process?

Yes, you can change your mind about dissolving your LLC in Colorado at any point before the dissolution is finalized.

Do I need to publish a notice of dissolution in a newspaper when dissolving an LLC in Colorado?

No, you do not need to publish a notice of dissolution in a newspaper when dissolving an LLC in Colorado.

What is the filing fee to dissolve an LLC in Colorado?

The filing fee to dissolve an LLC in Colorado is $25.

Can I voluntarily dissolve my LLC in Colorado?

Yes, you can voluntarily dissolve your LLC in Colorado by following the proper procedures.

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.