To dissolve a limited liability company one has to take up a set of required steps. In North Carolina, 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 North Crolina, 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 NC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of North Carolina 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 North Carolina LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in North Carolina
- After Dissolving Your LLC
- Reasons Behind Dissolving North Carolina LLC
- North Carolina LLC Dissolution Review
How to Dissolve an LLC in North Carolina
Dissolution of North Carolina LLC requires three broad procedural steps. Having a North Carolina LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the North Carolina Secretary of State.
Step 1: Follow Your North Carolina 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 North Carolina 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 North Carolina 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 North Carolina Articles of Organization, one has to file North Carolina 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 North Carolina 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 North Carolina 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.
P.O. Box 29622
Raleigh, NC 27626-0622
Online FIling: North Carolina Online LLC Dissolution
Filing Fee: $30
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 North Carolina LLC
Apart from these three steps, no major dissolution rules are there in North Carolina. 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 North Carolina includes the formation as well as dissolution fees. To dissolve an LLC in North Carolina, LLCs have to file an Article of Dissolution. The filing fee is $30. 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 North Carolina 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 North Carolina. A registered agent can help you do the needful.
Reasons Behind Dissolving North Carolina LLC
Everyone wants the best for their business, and they always put the best efforts they can into that. Even if the person is putting in everything, the company may still not get what it needs. At that time, there is only one solution left, and it is the dissolution of their business. To dissolve an LLC in North Carolina, it is better to notify the government about it. If you don’t do it according to the government, it can lead to consequences, here take a look at them,
- The company will need to keep paying the taxes for the operation.
- It will be necessary for the company to keep providing legal documents to the government.
- The government can ask for the involuntary dissolution of the company.
- The assets of the company will be of no use at all.
Top Businesses in North Carolina!
The state of North Carolina has been in plenty of profits for the past few years. It is one of the national leaders when it comes to the main industries of the economy. That is what makes it the best decision to start an LLC in North Carolina. The state has been making a lot of growth, and with the help of that, people are getting employment too. Here, check the top businesses of the state,
- Finance, insurance, and real estate: The leading service industry of the state is this one. The population of the state is going towards this specific sector as it has a lot of opportunities. The contribution of the finance sector to the GDP is $92.99 billion, and it sure is an incredible amount. Also, the most prominent companies of the state are joining-in in the industry.
- Manufacturing industry: The industry has contributed to the GDP by giving the amount of $88.77 billion. That is the contribution to Gross Domestic Product, but it is also great for the goods that the state needs. It manufactures a lot of tobacco products, chemicals, and electronic products too.
- Professional and business services: Many businesses come under this industry. There are private health care centers, schools, motels, research facilities, and many other things. So if the state needs anything, they can find almost everything under this sector. The sector also contributed $67.43 billion to the state for economic development too.
North Carolina LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your North Carolina LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your North Carolina 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 North Carolina
To dissolve an LLC in North Carolina you need to file the Articles of Dissolution with the North Carolina Corporations Division through mail or online by paying a filing fee of $30.
The cost to dissolve an LLC in North Carolina can vary from a few hundred dollars to a few thousand dollars depending on the complexity of the business and the amount of paperwork involved. The cost of dissolving an LLC includes the filing fees for dissolution documents, the costs of winding up the business, and the cost of any taxes due.
The first step in dissolving an LLC is to file the articles of dissolution. This is the official document that is filed with the North Carolina Secretary of State to indicate that the LLC is no longer actively doing business. The filing fee for the articles of dissolution is typically $125. A dissolution without a plan of dissolution or any other additional documents is considered a “plain vanilla” dissolution.
Once the articles of dissolution are filed, the LLC must then wind up its affairs. This includes collecting any outstanding debts, paying off any creditors, and distributing any remaining assets to the LLC members. Depending on the size and complexity of the business, this process can be quite involved and may require the services of a professional accountant or attorney. The costs associated with winding up the business can vary greatly depending on the amount of work involved.
Once the LLC’s affairs are wound up, the LLC then must pay any taxes due. In North Carolina, LLCs are required to pay the state income tax for the year in which the dissolution occurs. This tax is usually due by April 15th of the following year. The amount of tax due will depend on the LLC’s income for the year. The tax rate is based on the LLC’s total net income and can range from 3.07% to 7.75%.
In addition to the filing fees and taxes, there may be other costs associated with dissolving an LLC in North Carolina. For example, the LLC may need to pay for any professional services that were used in the dissolution process, such as the services of an accountant or attorney. The LLC may also need to pay for any advertising or other notices that are required by law to inform the public of the dissolution.
In summary, the cost to dissolve an LLC in North Carolina can vary greatly depending on the size and complexity of the business, the amount of paperwork involved, and any additional costs associated with winding up the business and paying any taxes due. However, in most cases, the total cost should be less than a few thousand dollars.
Yes, in North Carolina, there is a fee of $30 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the North Carolina SOS
No, there is no requirement of revenue department clearance till the time the SOS of North Carolina 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 North Carolina. If you have any query do let us know in the comment box.