How to Dissolve an LLC in DC

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

Step 1: Follow the LLC Operating Agreement in DC

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 DC.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. 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 close your various tax accounts without any hassle. Below are the best LLC services in DC 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 DC 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 DC to file the BOI Report. The Beneficial Ownership Information (BOI) in DC 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 DC Articles of Organization, one has to file DC 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 DC Secretary of State physical office along with the state filing fee.
If you want to dissolve DC 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 to SOS
Offline Applications	Articles of Dissolution
SOS Contact (if offline application is available)	Department of Consumer and Regulatory Affairs, Corporations Division, P.O. Box 92300, Washington, D.C. 20090
Filing Time	15 working days
Filing Fee	$220

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 DC

Apart from these three steps, no major dissolution rules are there in DC. 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 DC include the formation as well as dissolution fees. To dissolve an LLC in DC, LLCs have to file an Article of Dissolution. The filing fee is $220. 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 DC, you can reinstate or revive the same within a given time. In DC, the LLC name will be available up to the time till SOS dissolves the LLC completely. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in DC if that is available. According to the DC SOS, you can revive your LLC anytime as there is no time limit for reinstatement.

Reasons Behind Dissolving an LLC in DC

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 DC, 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 DC

With the population of 715,891, DC is one of the favorable places to start an LLC. According to several reports, starting an LLC for Transportation 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 DC.

Transportation Services
Accommodations
Restaurant
Professional Services
Health and Fitness Center

DC LLC Dissolution Review – A Quick Recap

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

Follow Your DC 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 DC?

To dissolve an LLC in DC, you must file articles of dissolution with the DC Department of Consumer and Regulatory Affairs.

What is the fee for dissolving an LLC in DC?

The fee to dissolve an LLC in DC is $72.

Can I file the articles of dissolution online in DC?

Yes, you can file the articles of dissolution online through the DCRA CorpOnline portal.

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

It typically takes around 15 business days for the DCRA to process the dissolution filing.

What are the requirements for dissolving an LLC in DC?

The main requirement is to file the articles of dissolution, but you may also need to settle any outstanding debts and obligations of the LLC.

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

Yes, you are required to provide notice to known creditors before dissolving an LLC in DC.

What happens to the assets of an LLC when it is dissolved in DC?

The assets of the LLC are typically used to pay off any outstanding debts and obligations before being distributed to the members.

Can I reinstate a dissolved LLC in DC?

Yes, you can apply for reinstatement within 5 years of dissolution by filing a reinstatement form and paying the required fees.

Are there any annual reporting requirements for a dissolved LLC in DC?

No, once an LLC is dissolved in DC, it is no longer required to file annual reports.

Can I dissolve an LLC in DC if it is involved in a lawsuit?

You may be required to settle any pending legal matters before dissolving an LLC in DC.

Do I need to cancel my LLC’s EIN when dissolving it in DC?

Yes, you should notify the IRS of the dissolution and cancel the EIN associated with the dissolved LLC.

What tax obligations does an LLC have when it is dissolved in DC?

The LLC must file a final tax return and pay any outstanding taxes before dissolution can be finalized.

Can I transfer the assets of a dissolved LLC to a new entity in DC?

Yes, you can transfer the assets to a new entity, but you must first settle any outstanding debts and obligations of the dissolved LLC.

Is there a specific form for dissolving an LLC in DC?

Yes, you must file the articles of dissolution form provided by the DC Department of Consumer and Regulatory Affairs.

Can I dissolve an LLC in DC if it has employees?

If the LLC has employees, you must fulfill all employment obligations, including final pay and benefits, before dissolving the entity.

Can I dissolve an LLC in DC if it has outstanding tax debts?

Before dissolving an LLC in DC, you must settle any outstanding tax debts with the DC Office of Tax and Revenue.

Can I dissolve an LLC in DC if it has outstanding regulatory fees?

Yes, you must settle any outstanding regulatory fees with the appropriate agencies before dissolving an LLC in DC.

Are there any penalties for failing to dissolve an LLC properly in DC?

Failing to properly dissolve an LLC in DC can result in penalties and fees being assessed against the entity and its members.

Can I dissolve an LLC in DC if it is in bankruptcy?

If an LLC is in bankruptcy, you may need to obtain approval from the bankruptcy court before dissolving it in DC.

Can I dissolve an LLC in DC if it is involved in a partnership?

If an LLC is part of a partnership, you must follow any partnership agreement or legal requirements before dissolving the entity in DC.

Can I dissolve an LLC in DC if it has assets in other states?

If an LLC has assets in other states, you may need to comply with the dissolution requirements of those states in addition to DC.

Can I dissolve an LLC in DC if it has pending contracts?

Before dissolving an LLC in DC with pending contracts, you must fulfill all obligations under those contracts or seek appropriate legal guidance.

Can I dissolve an LLC in DC if it has outstanding loans?

Yes, but you must settle any outstanding loans or debts before dissolving the LLC in DC.

Can I dissolve an LLC in DC if it has intellectual property assets?

Yes, you can dissolve an LLC in DC with intellectual property assets, but you must ensure that all IP rights are properly transferred or managed before dissolution.

Can I dissolve an LLC in DC if it is in a dispute with another entity?

If an LLC is in a dispute with another entity, you may need to resolve the dispute before dissolving the entity in DC.

Do I need to obtain a tax clearance certificate for dissolving an LLC in DC?

In some cases, you may be required to obtain a tax clearance certificate from the DC Office of Tax and Revenue before dissolving an LLC in DC.

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

If an LLC is involved in ongoing litigation, you may need to resolve the legal matters before dissolving the entity in DC.

Can I dissolve an LLC in DC if it has real estate holdings?

Yes, you can dissolve an LLC in DC with real estate holdings, but you must ensure that all property is properly transferred or managed after dissolution.

What are the steps to dissolve an LLC in DC?

The steps to dissolve an LLC in DC include getting approval from the members, settling any remaining business debts and obligations, and filing the necessary paperwork with the DCRA.

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

The cost to dissolve an LLC in DC is $55 for filing Articles of Dissolution with the DCRA.

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.