To dissolve a limited liability company one has to take up a set of required steps. In Washington DC, 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 District of Columbia, 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 LLC in DC (domestic or foreign) you must have a Washington D.C. LLC operating agreement. The first step towards the dissolution of Washington DC 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 Washington LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in the District of Columbia
- After Dissolving Your LLC
- Reasons Behind Dissolving Washington DC LLC!
- District of Columbia LLC Dissolution Review
How to Dissolve an LLC in the District of Columbia
Dissolution of Washington DC LLC requires three broad procedural steps. Having a Washington D.C. LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the District of Columbia Secretary of State.
Step 1: Follow Your District of Columbia 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 DC 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 closing 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, especially business entity tax account, 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 tax liabilities that limited liability companies have 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 tax, 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 Washington DC 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.
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 DC Articles of Organization, one has to file DC LLC Articles 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 multiple methods of filing available, such as file by mail, in-person drop, or/and online filing. To get the application form you need to visit the Secretary of State Website of DC state.
- You can follow the filing instruction on the official portal so that the steps for dissolution will be easier to complete.
- In that particular SOS website, the LLC owner has to look for the Domestic LLC Articles of Dissolution page.
- If you want to dissolve DC Foreign LLC then look for the Foreign LLC Dissolution process.
- 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.
- 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.
- It takes 3-5 business days for the formal dissolution process to be done after filing of articles of dissolution if you are filing it by mail or in-person. For the online filing, one can upload the pdf files on their official portal. It saves some of your mail time or in-person delivery.
Mail to or In-person Drop,
Department of Consumer And Regulatory Affairs
PO Box 92300
Washington, D.C. 20090
Online FIling: DC Online LLC Dissolution
Filing Fee: $220
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 DC LLC
Apart from these three steps, no major dissolution rules are there in Washington DC. However, 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 DC includes the formation as well as dissolution fees. To dissolve an LLC in District of Columbia, LLCs have to file an Article of Dissolution. The filing fee is $220. 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 DC LLC name immediately 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 DC. A registered agent can help you do the needful.
Reasons Behind Dissolving Washington DC LLC!
If someone cannot keep up with profits in the business, they would want just to shut it down. But is it possible to close the doors of the company and never open them? No, it is certainly not possible, and that is the very reason we are here. It is crucial to dissolve an LLC in the District of Columbia, and we have some reasons for it! Here, check them out!
- If the business is not dissolved, some outer audiences can put up a lot of questions.
- It can lead to loss and also involuntary dissolution too.
- The liability of the company owners will stay the same, and they will be liable to pay for it.
- They can be held against some lawsuits too.
- It won’t be possible for them to get as much profit by selling the assets later.
Top Businesses to Look For in the District of Columbia!
Having a limited liability company in Washington D.C. does not mean you are in a profitable business. If you are unable to make profits through your LLC then you might be in the wrong business. There are a number of leading industries in Washington D.C. that can give you a sharp profit margin if you start an LLC in Washington D.C. Here we have shared the top 3 industries in Washington D.C., have a look!
- Hospitality and tourism: There are some core sectors in the District of Columbia, and some are good for opportunities. But hospitality and tourism are some of the core sectors of the place. It is the strongest sector because it provides many jobs, and now it is supporting 75,000 jobs in the last few years. The industry has so many sub-sectors, and they also offer a lot of job opportunities there.
- Retail: It is the sector that is providing a lot to the GDP. And if we depict the contribution in numbers, it is $1.5 billion (yearly average). With the help of this sector, the place can provide more than net 23.000 jobs to people. When the rate of employment is higher, it impacts the economy a lot.
- Media and communications: It has been the most robust center of the media industry. The industry has given net 8,300 jobs to people, and it is also a core sector in the district.
District of Columbia LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your District of Columbia LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your District of Columbia 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 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 that you are indeed no longer in business.
What is the Cost to Dissolve an LLC in District of Columbia
To dissolve an LLC in District of Columbia you need to file the Statement of Dissolution with the Department of Consumer and Regulatory Affairs by mail or online and pay a filing fee of $220.
Dissolving a DC LLC is a complex process. It involves filing the right forms, announcing the dissolution, and clearing up outstanding liabilities. If not completed correctly, the owners can be personally liable for any business debts. As with any business, it is important to follow all District of Columbia regulations when dissolving your company. However, if you are not familiar with the process, hiring an attorney or accountant may be the best way to go.
To dissolve a DC LLC, you must fill out an Article of Dissolution form and submit it to the DC Office of Licensing and Consumer Protection. This document includes important information about your business, such as your name and date of formation. You can fill out the form online or mail it in. The fee is $99 for handwritten forms and $220 for electronic filing. For a three-day expedited service, it costs $50.
The article of dissolution also gives notice to all creditors. During the dissolution process, you will need to clear up any remaining business debts, pay any taxes you owe, and distribute any assets still belonging to your business to its members. In addition, you will need to notify all tax agencies and the IRS about your plan to close your LLC. Failure to do so can cause penalties, interest, and a state tax lien.
Another important part of the process is making sure you have the right documents in order. While many states do not require an operating agreement for an LLC, Washington D.C. has a special type called a series LLC. A series LLC is a type of LLC in which all members have their own duties and powers. Unlike most LLCs, the managers of a series LLC have separate powers.
Besides the articles of dissolution, you will need a tax clearance certificate from the Department of Revenue. You can obtain this document by contacting the DCRA or the Office of Licensing and Consumer Affairs. Your taxes will not be affected if you have paid them in advance.
Once you have completed the required paperwork, you can begin the actual dissolution process. Depending on the size of your business, you will need to contact various government entities and notify them of the plans to dissolve your business. Some of the most common duties include filing an annual report, paying taxes, and bringing the entity into good standing. Other tasks will depend on the type of business you operate.
Among the many duties of dissolving a DC LLC, the one that you will most likely encounter is the 120-day notice to creditors. During this time, you will need to give creditors a reasonable amount of time to file claims or otherwise seek payment. Also, you will need to prepare a list of all the taxes you have paid, including those related to your LLC.
It is important to note that dissolution costs are subject to change. Depending on the type of business you have, you might have to pay more than the usual amount. Using a reputable LLC service to handle the process of dissolving your business can save you from unnecessary costs and legal headaches.
Yes, in DC, there is a fee of $220 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the District of Columbia SOS.
No, there is no requirement of revenue department clearance until the SOS of the District of Columbia 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 the chances of seizing your property can also recover the 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 DC. If you have any query do let us know in the comment box.