To dissolve a limited liability company one has to take up a set of required steps. In Michigan, 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 Michigan, 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 Michigan LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Michigan 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 Michigan LLC.
On this page, you’ll learn about the following:
How to Dissolve an LLC in Michigan
Dissolution of Michigan LLC requires three broad procedural steps. Having a Michigan LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Michigan Secretary of State.
Step 1: Follow Your Michigan 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. Michigan 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.
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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 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.
Tax clearance
While dissolving the Michigan 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 Michigan Articles of Organization, one has to file Michigan 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 Michigan 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 Michigan 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.
Mail to,
Michigan Department of Licensing and Regulatory Affairs Corporations, Securities
Commercial Licensing Bureau Corporations Division
P.O. Box 30054
Lansing, MI 48909
In-Person Drop,
Michigan Department of Licensing and Regulatory Affairs
Corporations Division
2501 Woodlake Cir.
Okemos, MI 48864
Online FIling: Michigan Online LLC Dissolution
Filing Fee: $10
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 Michigan LLC
Apart from these three steps, no major dissolution rules are there in Michigan. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.
Winding Up
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 Michigan includes the formation as well as dissolution fees. To dissolve an LLC in Michigan, LLCs have to file an Article of Dissolution. The filing fee is $10. 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 Michigan 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 Michigan. A registered agent can help you do the needful.
Reasons Behind Dissolving Michigan LLC
It is all about how someone wants to start an LLC in Michigan; they can easily do it. The law allows any prospect to do that without any questions. But they have to go through the same legal process to dissolve the company too. There are so many reasons why someone decides to dissolve the company. Here are some,s
- The company has reached an extent where there is no progress; they will decide to shut it.
- The company’s directors can’t get better outcomes in profits or decisions.
- The liabilities of the companies are overcoming the assets of the company.
- The owners of the company are going bankrupt.
- The clients are shifting on to the bigger and better companies.
Top Businesses in Michigan!
Michigan is a great place for someone to start a new business. Those who try and get better info are never in the position to dissolve an LLC in Michigan. With a piece of greater knowledge, the person can earn greater profits. So why not get the best info one can get and keep on continuing with the business? Want the information? We have it right here in the below-mentioned points,
- Manufacturing: There is a lot that a person can get with the help of this industry. Michigan is getting an economic growth of $83.3 billion with a contribution from this sector. It is not just about the growth, and people are also getting more jobs from this sector. These reasons make the sector of manufacturing an important one.
- Insurance and leasing: No industry can thrive without any financial support. It is all about the best services and insurance for the loss that saves many horrible things. It is also leading to the growth of Michigan by contributing $78.8 billion in GDP too.
- Social assistance: As much as we need other services, we need social assistance and the healthcare industry. The industry makes the possibilities of growth possible by representing $41.87 billion by giving the environment what it needs.
- Retail trade: The trade of goods is an important thing for a place. Without trade, the state can’t get the things that they need. There is wholesale trade too, but it is doing much better than wholesale. It contributes $29.35 billion to the economy, which induces growth too.
Michigan LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Michigan LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Michigan 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 Michigan
To dissolve an LLC in Michigan you need to file the Certificate of Dissolution with the Michigan Department of Licensing and Regulatory Affairs via mail or online for $10.
When deciding whether to dissolve an LLC in Michigan, the cost to do so is a major factor to consider. An LLC is a type of business structure that helps protect personal assets from business debts and liabilities. Dissolving an LLC in Michigan requires filing paperwork with the Michigan Department of Licensing and Regulatory Affairs, which carries a filing fee. There may also be additional costs associated with the dissolution process, such as legal fees, taxes, and other costs related to winding up the LLC’s operations.
The filing fee to dissolve an LLC in Michigan is $20. The filing must include a Certificate of Dissolution, signed by a majority of the LLC’s members or managers. The filing must also include a Statement of Intention to Dissolve, which includes a description of the LLC’s assets and liabilities, and a list of its members and managers.
In addition to the filing fee, there may be other costs associated with dissolving an LLC in Michigan. These costs can include legal fees, if the LLC hires an attorney to help with the dissolution process, as well as taxes and other costs related to winding up the LLC’s operations. Depending on the circumstances, these costs can be significant.
When dissolving an LLC in Michigan, it’s important to complete the dissolution process properly. The LLC must terminate all contracts, pay all outstanding debts and liabilities, and distribute any remaining assets to the members or managers. The LLC must also notify all creditors of the dissolution, and publish a notice in a newspaper of general circulation in the county where the LLC was originally formed.
It’s also important to note that the process of dissolving an LLC in Michigan is separate from the process of winding up its operations. The LLC must still file all necessary tax returns, pay any taxes due, and terminate its registered agent. The LLC must also notify the Secretary of State’s office that it is no longer doing business in Michigan.
Dissolving an LLC in Michigan can be a complicated process, but it’s important to understand the costs involved. The filing fee is $20, but there may be additional costs associated with the dissolution process, such as legal fees, taxes, and other costs related to winding up the LLC’s operations. It’s important to complete the dissolution process properly, and to make sure all outstanding debts and liabilities are paid before officially dissolving the LLC.
F.A.Qs
Yes, in Michigan, there is a fee of $10 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Michigan SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Michigan 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.
In Conclusion
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 Michigan. If you have any query do let us know in the comment box.