To dissolve a limited liability company one has to take up a set of required steps. In New Jersey, 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 New Jersey, 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 NJ (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of New Jersey 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 New Jersey LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in New Jersey
- After Dissolving Your LLC
- Reasons Behind Dissolving New Jersey LLC
- New Jersey LLC Dissolution Review
How to Dissolve an LLC in New Jersey
Dissolution of New Jersey LLC requires three broad procedural steps. Having a New Jersey LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the New Jersey Secretary of State.
Step 1: Follow Your New Jersey 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 New Jersey 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 New Jersey 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 New Jersey Certificate of Formation, one has to file New Jersey 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 New Jersey 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 New Jersey 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 email or online.
Online FIling: New Jersey LLC Certificate of Cancellation
Filing Fee: $128 by Credit Card & $126 By eCheque
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 New Jersey LLC
Apart from these three steps, no major dissolution rules are there in New Jersey. 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 New Jersey includes the formation as well as dissolution fees. To dissolve an LLC in New Jersey, LLCs have to file an Article of Dissolution. The filing fee is $128. 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 New Jersey 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 New Jersey. A registered agent can help you do the needful.
Reasons Behind Dissolving New Jersey LLC
Having an LLC is the best thing. A time can still come that it will be necessary to dissolve an LLC in New Jersey. It won’t be just because you didn’t make full efforts, and it can be because of the economy. There are plenty of reasons why it can be necessary. Are you interested in knowing these decisions? Here, take a look at some of them,
- It can happen if there is a lot of competition in the market.
- The owners can shut the company due to fewer profits.
- The reason can be an inadequate expenditure of the company’s money.
- If the company is not depositing its due amounts, it will need to dissolve the company.
- If one of the company’s owners is bankrupt, it will be critical to dissolve.
Top Businesses in New Jersey!
In the economy of New Jersey, it is a critical thing to make a better choice of the industry. There are so many sectors in the economy of this state that it can take a lot of research. But for sure, it is not something that everyone can do adequately. So if you want to start an LLC in New Jersey, it is better to have all the info. Here, let’s get through the information of some of the top industries,
- Finance: There are commercial real estate sectors like office buildings and factories, and insurance sectors. All these sectors are the ones that increase the productivity of the state. With the help of these services, the industry can make a better economy for New Jersey. The amount turned out to be $109.49 billion in total.
- Business services: There are some private sectors for health care, some hotels, and casinos too. They induce the betterment of society and increase the cash receipts. With the help of these services, the industry can make better money. They contribute $97.73 billion to the GDP, too, as it has a lot of production.
- Manufacturing: The leading manufacturing product of the state is chemicals. They make the pharmaceutical drugs for and trade them too. There are so many other products that are under this particular category. The products are shampoos, perfumes, lotions, etc. the contribution came up to be a lot which is $49.88 billion to the GDP.
New Jersey LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your New Jersey LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your New Jersey 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 New Jersey
To dissolve an LLC in New Jersey you need to file the Certificate of Cancellation with the New Jersey Division of Revenue & Enterprise Services through mail or online for $128 by credit card or $126 by echeck.
The cost of dissolving an LLC in New Jersey depends on the number and complexity of the assets and liabilities of the LLC. Generally, the cost of dissolving an LLC in New Jersey can range from a few hundred dollars to several thousand dollars. The cost of dissolving an LLC in New Jersey includes the filing fees for the required documents, the legal fees for the preparation of the documents, and the cost of closing out the LLC’s business accounts.
The first step in dissolving an LLC in New Jersey is to file the Articles of Dissolution with the State. The Articles of Dissolution must include the name of the LLC, the date of dissolution, and the number of members who are authorizing the dissolution. The filing fee for the Articles of Dissolution is usually around $50.
Once the Articles of Dissolution have been filed with the State, the LLC must notify its creditors of the dissolution. This notification must be done in writing and must include the date of dissolution, the name of the LLC, and the address of the LLC. The LLC must also provide a copy of the Articles of Dissolution to the creditors.
Once the creditors have been notified, the LLC must distribute its assets to its members and creditors. The LLC must also pay off any outstanding debts, such as taxes, wages, and other liabilities. Any remaining assets must be liquidated and the proceeds must be distributed to the members and creditors.
Once the assets have been distributed and the debts have been paid off, the LLC must file a Certificate of Dissolution with the State. This document officially dissolves the LLC and terminates its legal existence. The filing fee for the Certificate of Dissolution is usually around $50.
In addition to the filing fees, the LLC may incur legal fees for the preparation of the required documents. The legal fees can range from a few hundred dollars to several thousand dollars, depending on the complexity of the dissolution process. The LLC may also incur costs for closing out its business accounts and paying off any remaining debts.
Overall, the cost of dissolving an LLC in New Jersey can range from a few hundred dollars to several thousand dollars, depending on the number and complexity of the assets and liabilities of the LLC. The cost of dissolving an LLC in New Jersey includes the filing fees for the required documents, the legal fees for the preparation of the documents, and the cost of closing out the LLC’s business accounts.
Yes, in New Jersey, there is a fee of $128 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the New Jersey SOS.
No, there is no requirement of revenue department clearance till the time the SOS of New Jersey 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 New Jersey. If you have any query do let us know in the comment box.