To dissolve a limited liability company one has to take up a set of required steps. In Iowa, 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 Iowa, 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 Iowa (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Iowa 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 Iowa LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Iowa
- After Dissolving Your LLC
- Reasons Behind Dissolving Iowa LLC
- Iowa LLC Dissolution Review
How to Dissolve an LLC in Iowa
Dissolution of Iowa LLC requires three broad procedural steps. Having an Iowa LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Iowa Secretary of State.
Step 1: Follow Your Iowa 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 Iowa 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 Iowa 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 an Iowa Certificate of Formation, one has to file Iowa 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 Iowa 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 Iowa 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.
Secretary of State
Business Services Division
Lucas Building, 1st Floor
Des Moines, Iowa 50319
Online FIling: Iowa Online LLC Dissolution
Filing Fee: $5
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 Iowa LLC
Apart from these three steps, no major dissolution rules are there in Iowa. 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 Iowa includes the formation as well as dissolution fees. To dissolve an LLC in Iowa, LLCs have to file an Article of Dissolution. The filing fee is $5. 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 Iowa 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 Iowa. A registered agent can help you do the needful.
Reasons Behind Dissolving Iowa LLC
Dissolving a business is not an easy task. Now you might ask, why is that? The reason is, even if we are talking about an LLC, it will be crucial to do it adequately. Without a proper dissolution, the company cannot get off the liabilities and shut down the business. Now you may ask, why would someone want to dissolve an LLC in Iowa? So, here, let us give you a tour of the possible reasons.
- Many times there is a lot of competition in the market. So the company is not able to thrive, and it leads to dissolution.
- The economic condition of the state can also be a reason why people dissolve their companies.
- The low income of the company is also something that can lead to the dissolution.
- If the plans of the company can go astray which can cause the dissolution too.
Top Businesses in Iowa!
The states are making money with the industries giving out more cash receipts than the other ones. And these are the industries that are worth trying and investing in too. Why do people not look for the best industry to start an LLC in Iowa rather than go with anything? If they check the facts properly, it would be effortless to make profits with it too. So get to know the important sectors in the following points!
- Manufacturing: This sector doesn’t just go with the best economic aspects, but it also provides many jobs. With the help of this industry, many people get the job, including many women. It presents the economy of the state with $30.06 billion in GDP too.
- Government enterprises: There are not just the normal enterprises that are in the state of Iowa. But it also has some government enterprises that are making a lot of money for the state too. If we talk about these facts in figures, it represents $19.16 billion in the GDP.
- Agriculture: Agriculture, forestry, hunting, and fishing is also a great sector that induces profits and the economy of Iowa. With the help of proper research, we can get the actual factoids about it too. It is an industry that no one can live without and is best for a new business. It has represented about $13.37 billion to the GDP too.
Iowa LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Iowa LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Iowa 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 Iowa
To dissolve an LLC in Iowa you need to file the Statement of Dissolution with the Iowa Secretary of State via mail or online for $5.
The cost to dissolve an LLC in Iowa depends on a few factors, such as the type of LLC, the complexity of the LLC, and any fees associated with the dissolution. LLCs can be dissolved voluntarily or involuntarily, and the cost will vary accordingly. The cost to dissolve an LLC in Iowa can also vary depending on the number of members in the LLC, the amount of assets, and any debts the LLC may have.
Voluntarily Dissolving an LLC in Iowa
If an LLC is voluntarily dissolved, the cost will depend upon the terms outlined in the LLC’s operating agreement. Most LLC operating agreements outline the steps for dissolution, and any associated costs. For example, if the LLC has members, the members may be required to vote to dissolve the LLC, and the cost of this vote may be included in the operating agreement. Additionally, the LLC may need to file dissolution paperwork with the Iowa Secretary of State, which may incur a filing fee.
Involuntarily Dissolving an LLC in Iowa
If an LLC is involuntarily dissolved, the cost will depend on the cause of dissolution. For example, an LLC may be involuntarily dissolved due to a court order, or if the members fail to take the necessary steps to keep the LLC in good standing. In such cases, the cost of dissolution may include any court or legal fees associated with the dissolution. Additionally, the LLC may need to file dissolution paperwork with the Iowa Secretary of State, which may incur a filing fee.
Other Costs to Dissolve an LLC in Iowa
In addition to any associated filing fees, the cost to dissolve an LLC in Iowa may include any costs associated with winding up the LLC’s affairs. This may include paying any outstanding debts or liabilities, as well as transferring any remaining assets to the LLC’s members or creditors. Additionally, the cost may include any taxes or fees associated with the dissolution.
The cost to dissolve an LLC in Iowa depends on a few factors, such as the type of LLC, the complexity of the LLC, and any fees associated with the dissolution. Additionally, the cost may also include any costs associated with winding up the LLC’s affairs, such as paying any outstanding debts or liabilities, or transferring any remaining assets. It is important to note that the cost to dissolve an LLC in Iowa may vary depending on the number of members in the LLC, the amount of assets, and any debts the LLC may have.
Yes, in Iowa, there is a fee of $5 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Iowa SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Iowa 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 Iowa. If you have any query do let us know in the comment box.