To dissolve a limited liability company one has to take up a set of required steps. In Hawaii, 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 Hawaii, 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 a Hawaii LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Hawaii 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 Hawaii LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Hawaii
- After Dissolving Your LLC
- Reasons Behind Dissolving Hawaii LLC
- Hawaii LLC Dissolution Review
How to Dissolve an LLC in Hawaii
Dissolution of Hawaii LLC requires three broad procedural steps. Having a Hawaii LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Hawaii Secretary of State.
Step 1: Follow Your Hawaii 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 Hawaii 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, 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 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. If you want to do the accounting yourself or make accounting easy, try FreshBooks.
While dissolving the Hawaii 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. Like a Hawaii Articles of Organization, one has to file Hawaii 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 Hawaii 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 Hawaii 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 after filing of articles of dissolution if you are filing it by mail or in-person.
Department of Commerce and Consumer Affairs
Business Registration Division
P.O. Box 40
Honolulu, HI 96810
335 Merchant Street
Honolulu, HI 96813
Online FIling: Hawaii Online LLC Dissolution
Email: [email protected]
Fax: (808) 586-2733
Filing Fee: $25
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 Hawaii LLC
Apart from these three steps, no major dissolution rules are there in Hawaii. 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 Hawaii includes the formation as well as dissolution fees. To dissolve an LLC in Hawaii, LLCs have to file an Article of Dissolution. The filing fee is $25. 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 Hawaii 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 Hawaii. A registered agent can help you do the needful.
Reasons Behind Dissolving Hawaii LLC
A business is aimed at greater profits, but if by any chance it is incurring losses, it is bound to be dissolved. But, if someone needs to want to dissolve an LLC in Hawaii, they need to make better decisions about it. It is all about legal operations, so people are looking for all rules and regulations to do it. There can be so many reasons that can lead to dissolution. Want to know? Check them here!
- The owners want to be safe from lawsuits.
- The owners are concerned that they will be liable to pay tax amounts.
- The owners can disagree about something in the aspect of the business.
- If the cost of the business is not covered, they can look for dissolution at that time.
Top Business in Hawaii!
Businesses are the main way that the state can contribute better and be developed. These things ensure that a person gets better, and with better knowledge, they can earn a fortune. With the proper information about the industry or the sector, the person can quickly start an LLC in Hawaii. It won’t be just easy or effortless, but it will be so profitable for them too. So check the top sectors here!
- Tourism: One of the most significant sectors of Hawaii is tourism. The approximate amount of 21% goes to the economy, and the revenue is in billions. With the help of this sector, all can get better opportunities in jobs and economy-wise.
- Manufacturing: Over thousands of people work in this industry, which is also why it stands vital for the state. With the help of 2% in the Gross Domestic Product, it is providing growth and economy to the place. This sector is the one that was much stronger in the early times, but still is one of the top sectors. That is why there is no way this industry will fall into dust and will keep on giving profits.
- Agriculture: Hawaii has been the best-known place for tourism, but it is one of the sectors that impact the economy. It is providing a lot to the state and contributing to GDP too. The percentage that this sector represents is 1.2% in GDP, which is a reasonable amount too.
Hawaii LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Hawaii LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Hawaii 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 Hawaii
To dissolve an LLC in Hawaii you need to file the Articles of Dissolution with the Hawaii Department of Commerce and Consumer Affairs by mail, fax, in person or online for $25.
The cost to dissolve an LLC in Hawaii depends on a variety of factors. The most common costs associated with dissolving an LLC in Hawaii include filing fees, attorney’s fees, and any other applicable taxes or fees. In general, LLCs in Hawaii are required to pay an initial filing fee of $50 when they first register.
The cost of attorney’s fees will vary depending on the complexity of the dissolution process and the amount of legal work involved. Generally, attorney fees range from $500 to $2,000, but they can go up to $10,000 or more depending on the complexity of the dissolution process.
The other costs associated with dissolving an LLC in Hawaii include any applicable taxes or fees. These may include federal income tax, state income tax, and any applicable state or local taxes. Additionally, the LLC may be liable for any unpaid wages or benefits to employees, as well as any outstanding debts to creditors.
In addition to the filing and attorney’s fees, there are other costs associated with dissolving an LLC in Hawaii. These may include the cost of notifying the public, such as sending notices to creditors or publishing a notice in a local newspaper, as well as the cost of transferring any assets to new owners.
Once all of the necessary steps have been taken to dissolve the LLC, the state of Hawaii will issue a Certificate of Dissolution. This certificate is required to officially close the LLC in Hawaii and must be filed with the Department of Commerce and Consumer Affairs.
Once the LLC has been officially dissolved, owners may file a Certificate of Cancellation with the IRS to ensure that they are no longer required to pay taxes on their LLC’s profits. Additionally, the LLC may be required to cancel its business licenses and other registrations in the state of Hawaii.
In summary, the cost to dissolve an LLC in Hawaii varies depending on the complexity of the dissolution process, the amount of legal work involved, and any applicable taxes or fees. Generally, the initial filing fee is $50, but attorney’s fees, taxes, and other costs may add up to several thousand dollars. Additionally, owners may be required to file a Certificate of Cancellation with the IRS and cancel any business licenses or other registrations in the state of Hawaii.
Yes, in Hawaii, there is a fee of $25 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Hawaii SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Hawaii 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 Hawaii. If you have any query do let us know in the comment box.