How to Dissolve an LLC in Kentucky

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

Step 1: Follow the LLC Operating Agreement in Kentucky

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 Kentucky.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. Kentucky 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 Kentucky that we strongly recommend for you.

LLC Service	Our Rating & Pricing	Top Features	Learn More
#1 TOP PICK	4.5/5 $0 + State Fees	100% accuracy guarantee Worry-free service Great customer support	Learn More
	4/5 $0 + State Fees	Free LLC Formation Affordable Add-on services Other business solutions	Learn More

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 Kentucky 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 Kentucky to file the BOI Report. The Beneficial Ownership Information (BOI) in Kentucky 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 Kentucky Articles of Organization, one has to file Kentucky 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 Kentucky Secretary of State physical office along with the state filing fee.
If you want to dissolve Kentucky 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	File LLC Dissolution Online
Offline Applications	LLC Certificate of Cancellation
SOS Contact (if offline application is available)	Michael G. Adams, Office of the Secretary of State, P.O. Box 718, Frankfort, KY 40602
Filing Time	Up to 5 working days for both online and offline filing. In case of walk-in filing it takes more time.
Filing Fee	$40

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 Kentucky

Apart from these three steps, no major dissolution rules are there in Kentucky. 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 Kentucky include the formation as well as dissolution fees. To dissolve an LLC in Kentucky, LLCs have to file an Article of Dissolution. The filing fee is $40. 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 Kentucky, you can reinstate or revive the same within a given time. In Kentucky, 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 Kentucky if that is available. According to the Kentucky SOS, you can revive your LLC after you file the formation documents afresh. There is no time limit to revive your LLC in Kansas.

Reasons Behind Dissolving an LLC in Kentucky

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 Kentucky, 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 Kentucky

With the population of 4,555,777, Kentucky is one of the favorable places to start an LLC. According to several reports, starting an LLC for Logistics and Distribution 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 Kentucky.

Logistics and Distribution
Food Sales/Restaurant Business
Bourbon Sales and Production
Farming Business
Retail Business

Kentucky LLC Dissolution Review – A Quick Recap

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

Follow Your Kentucky 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 Kentucky?

To dissolve an LLC in Kentucky, you must file articles of dissolution with the Kentucky Secretary of State.

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

The filing fee for dissolving an LLC in Kentucky is $40.

Can I dissolve my Kentucky LLC online?

Yes, you can dissolve your Kentucky LLC online through the Kentucky Secretary of State’s website.

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

It typically takes 7-10 business days for the Kentucky Secretary of State to process the dissolution of an LLC.

Do I need to file a final tax return for my Kentucky LLC when dissolving?

Yes, you must file a final tax return for your Kentucky LLC when dissolving.

Are there any annual reporting requirements for a dissolved Kentucky LLC?

No, once a Kentucky LLC is dissolved, it is no longer required to file annual reports.

Can I reinstate a dissolved Kentucky LLC?

Yes, you can reinstate a dissolved Kentucky LLC by filing an application for reinstatement with the Kentucky Secretary of State.

What happens to the assets of a dissolved Kentucky LLC?

The assets of a dissolved Kentucky LLC must be distributed to the company’s creditors and members according to the operating agreement.

Do I need to notify creditors and tax agencies when dissolving a Kentucky LLC?

Yes, you must notify creditors and tax agencies when dissolving a Kentucky LLC.

Can I dissolve a Kentucky LLC if it has outstanding debts?

Yes, you can dissolve a Kentucky LLC even if it has outstanding debts, but you will still be responsible for them.

What is the process for canceling the Kentucky LLC’s business licenses and permits?

To cancel business licenses and permits for a Kentucky LLC, you must notify the appropriate licensing agencies and file any necessary paperwork.

Can I transfer my Kentucky LLC to another state instead of dissolving it?

Yes, you can transfer your Kentucky LLC to another state by filing foreign qualification paperwork in the new state.

Are there any specific requirements for dissolving a Kentucky LLC with multiple members?

If a Kentucky LLC has multiple members, all members must agree to dissolve the LLC in accordance with the operating agreement.

Can I dissolve a Kentucky LLC if it is involved in ongoing litigation?

Yes, you can dissolve a Kentucky LLC that is involved in ongoing litigation, but it may complicate the legal proceedings.

Do I need to notify employees when dissolving a Kentucky LLC?

Yes, you must notify employees of a Kentucky LLC when dissolving the company.

What is the process for closing out business accounts when dissolving a Kentucky LLC?

When dissolving a Kentucky LLC, you must close out all business accounts and settle any outstanding debts.

Can I dissolve a Kentucky LLC if it’s not currently generating revenue?

Yes, you can dissolve a Kentucky LLC even if it’s not generating revenue, as long as you comply with the legal requirements.

What is the deadline for filing articles of dissolution for a Kentucky LLC?

There is no specific deadline for filing articles of dissolution for a Kentucky LLC, but it should be done as soon as possible after the decision to dissolve.

Do I need to publish a notice of dissolution in a Kentucky newspaper?

No, you are not required to publish a notice of dissolution in a Kentucky newspaper when dissolving an LLC.

What happens to the Kentucky LLC’s name after dissolution?

Once a Kentucky LLC is dissolved, its name becomes available for use by other businesses.

Can I dissolve a Kentucky LLC if it has significant assets?

Yes, you can dissolve a Kentucky LLC with significant assets, but you must ensure that those assets are properly distributed during the dissolution process.

Do I need to notify the IRS when dissolving a Kentucky LLC?

Yes, you must notify the IRS when dissolving a Kentucky LLC, and file a final tax return for the company.

Can I dissolve a Kentucky LLC without the consent of all members?

No, all members of a Kentucky LLC must agree to dissolve the company, unless the operating agreement specifies otherwise.

What is the process for releasing any personal guarantees when dissolving a Kentucky LLC?

When dissolving a Kentucky LLC, you must take steps to release any personal guarantees made on behalf of the company.

Can a dissolved Kentucky LLC be revived at a later date?

Yes, a dissolved Kentucky LLC can be revived by filing an application for reinstatement with the Kentucky Secretary of State.

Are there any tax implications for dissolving a Kentucky LLC?

Yes, there may be tax implications for dissolving a Kentucky LLC, so it’s important to consult with a tax professional.

Can I dissolve a Kentucky LLC if it has no liabilities?

Yes, you can dissolve a Kentucky LLC with no liabilities, as long as you follow the proper dissolution procedures.

What is the process for notifying customers and vendors when dissolving a Kentucky LLC?

When dissolving a Kentucky LLC, you must notify customers and vendors of the impending closure and settle any outstanding business arrangements.

Can I transfer the assets of a dissolved Kentucky LLC to another entity?

Yes, you can transfer the assets of a dissolved Kentucky LLC to another entity, but it must be done in accordance with the law.

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

The filing fee to dissolve an LLC in Kentucky is $40.

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.