To dissolve a limited liability company one has to take up a set of required steps. In Minnesota, 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 Minnesota, 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 Minnesota LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of MInnesota 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 Minnesota LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Minnesota
- After Dissolving Your LLC
- Reasons Behind Dissolving Minnesota LLC
- Minnesota LLC Dissolution Review
How to Dissolve an LLC in Minnesota
Dissolution of Minnesota LLC requires three broad procedural steps. Having a Minnesota LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Minnesota Secretary of State.
Step 1: Follow Your Minnesota 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 Minnesota 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 Minnesota 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.
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 Minnesota Articles of Organization, one has to file Minnesota 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 MInnesota 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 Minnesota 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.
- Along with the termination form, one has to submit the Statement of Dissolution.
- 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.
Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103
Online FIling: MInnesota Online LLC Dissolution
Filing Fee: $35
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 Minnesota LLC
Apart from these three steps, no major dissolution rules are there in Minnesota. 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 Minnesota includes the formation as well as dissolution fees. To dissolve an LLC in Minnesota, LLCs have to file an Article of Dissolution. The filing fee is $35. 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 Minnesota 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 Minnesota. A registered agent can help you do the needful.
Reasons Behind Dissolving Minnesota LLC
There are many diverse kinds of business entities. Every type of entity has obligations, and they all need legal documentation. Along with legal documents, it requires efforts, resources, and money too. But if the company is still not thriving, it is better to dissolve an LLC in Minnesota. There can be several reasons why people would dissolve their company. It could be voluntary or involuntary. Let’s go through some involuntary reasons,
- The business owners got into some illegal practices with the company.
- The owners have not paid the taxes regarding their company sufficiently.
- The assets are used unwisely under the name of the company.
- The business entity has completed the work years according to the deed.
- An owner of the company faced an untimely death.
Top Businesses in Minnesota!
Anyone can start an LLC in Minnesota, but it depends on their intellect on how they do it. With proper investment and a proper way of starting the company, they can get to greater extents. The state has different industries that are making it possible for them to increase the economy. If you want your company to be a part of a good economy, be sure to check the best industries. Here, we are mentioning the top sectors of the state that make better contributions
- Manufacturing: There are many other industries too, but it is making the most of its resources. With the help of this sector, the state is getting a representation of $49.14 billion in the economy. It provides the best and ensures that the population receives the employment services too.
- Professional services: It all depends on the goods for some people. But these professional services by the business sector are making a good impact also. It provides the economy with $46.36 billion in GDP and ensures there is better growth.
- Healthcare: Such industries keep the state going and assist them in a lot of ways. People need education so that they can get it at a low price from these industries. It is not the people who get the service, but people get employment in this sector too. They represent the GDP well with $34.35 billion.
- Food services: People love to spend on leisure, but there is no shortage of people who spend on food. That is the very reason this sector has been able to represent the GDP by $7.82 billion too.
Minnesota LLC Dissolution Review
Time needed: 5 minutes
Here’s a recap of the steps you must follow when dissolving your Minnesota LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Minnesota 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 Minnesota
To dissolve an LLC in Minnesota you need to file the Statement of Termination with the Minnesota Secretary of State via mail or in person for $35. It can be expedited for $55.
One significant cost to consider in dissolving an LLC is the filing fee. In Minnesota, the filing fee to dissolve an LLC is $45 as of August 2021. This fee must be paid when submitting the Articles of Dissolution to the Minnesota Secretary of State. Business owners should factor this cost into their financial planning when considering the dissolution of their LLC.
Another cost to keep in mind is the potential for legal fees. While not mandated by the state, it is often wise to seek legal advice during the dissolution process. Attorneys can assist with ensuring all necessary paperwork is filed correctly and that the process follows the applicable legal requirements. These professionals guide business owners through the intricate procedural labyrinth, helping them avoid unnecessary legal complications. As such, attorney fees vary and should be considered when estimating the overall cost.
Financial obligations to be discharged and contracts to be terminated can also contribute to the cost of dissolving an LLC. Business owners must settle any outstanding debts, including loans, leases, and outstanding bills. Dissolving an LLC often requires carefully reviewing existing contracts, taking thorough inventory, and ensuring all financial responsibilities are met before moving forward. Disentangling from contractual obligations can be both time-consuming and costly but is a necessary part of the dissolution process.
Additionally, business owners may also encounter additional costs such as fulfilling tax obligations. Taxes can vary depending on the circumstances of the LLC’s dissolution and its financial statements. Closing out tax obligations is crucial to avoiding any future legal complications or delays. Calculating potential tax obligations and consulting with tax professionals, if needed, will ensure accurate budgeting and allow for smooth dissolution proceedings.
Lastly, business owners dissolving an LLC should also be aware of any ongoing operating costs that need continued payment. These costs include, but are not limited to, utility bills, employees’ final payments, unemployment insurance costs, and the fees for maintaining the registered agent if one was appointed for the LLC. It is crucial to estimate these ongoing expenses to avoid unseen financial surprises.
Business owners considering the dissolution of their LLC must be diligent in understanding the true cost associated with this process. While the filing fee and attorney fees are reasonably predictable, the additional expenses, such as fulfilling financial obligations and discharging contractual agreements, can be less predictable. These hidden costs remind us that dissolving an LLC is not a decision to be taken lightly and requires careful consideration of financial planning.
Yes, in Minnesota, there is a fee of $35 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Minnesota SOS.
No requirement of revenue department clearance is required until the SOS of Minnesota 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 MInnesota. If you have any query do let us know in the comment box.