To dissolve a limited liability company one has to take up a set of required steps. In Pennsylvania, 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 Pennsylvania, 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 PA (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Pennsylvania 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 Pennsylvania LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Pennsylvania
- After Dissolving Your LLC
- Reasons Behind Dissolving Pennsylvania LLC
- Pennsylvania LLC Dissolution Review
How to Dissolve an LLC in Pennsylvania
Dissolution of Pennsylavnia LLC requires three broad procedural steps. Having a Pennsylvania LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Pennsylvania Secretary of State.
Step 1: Follow Your Pennsylvania 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 Pennsylvania 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 Pennsylvania 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 Pennsylvania Certificate of Formation, one has to file Pennsylvania 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 Pennsylvania 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 Pennsylvania 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.
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
Filing Fee: $70
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 Pennsylvania LLC
Apart from these three steps, no major dissolution rules are there in Pennsylvania. 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 Pennsylvania includes the formation as well as dissolution fees. To dissolve an LLC in Pennsylvania, LLCs have to file an Article of Dissolution. The filing fee is $70. 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 Pennsylvania 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 Pennsylvania. A registered agent can help you do the needful.
Reasons Behind Dissolving Pennsylvania LLC
Pennsylvania is an excellent place for an entrepreneur to have a company of their own. The economy can help the person earn a lot if he makes reasonable efforts towards it. But what if other reasons make the owners of the company want to dissolve an LLC in Pennsylvania? Yes, there can be many reasons for this, and they are all as necessary as the other ones. Let’s check them out,
- If the members of the company have no will to take the company on for more years.
- It can be because the company is not getting to the aim that was intended for it.
- If some of the owners want to leave the company, there will be a need for dissolution.
- If any of the owners goes insane, it will be crucial to dissolve the company.
Top Businesses in Pennsylvania!
There is a proper need for revenue for sure, and it is only possible if the person makes all possible efforts. If someone needs to start an LLC in Pennsylvania, it is on them and their chosen industry. With the help of these things, the user can get the best of what he aspires. All that is needed is the information about the prospects, and we are here to provide that,
- Finance: The financial industry is what we need, and without that, the state will not get the best of what it needs. This industry provides the most to the GDP with a contribution of $124.27 billion.
- Professional services: There are many private service providers that we need. It is this sector that induces growth in the personal and professional businesses in the state. So keep a check on that as it can lead to a better opportunity too. The sector provided the amount of $96.7 billion to the economy too.
- Manufacturing: There is no way that a state can live without the manufacturing sector at all. The industry allows the people to get jobs and GDP to get the amount of $83.86 billion. With this, people are getting employment, and the state is getting productive.
- Educational services: The social assisting services make the state a better place for the people who live there. The private service providers are there, but these services ensure people with less money can get what they want. The contribution of this sector is $8.4 billion.
Pennsylvania LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Pennsylvania LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Pennsylvania 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 to your state where your LLC operates is that you are indeed no longer in business.
What is the Cost to Dissolve an LLC in Pennsylvania
To dissolve an LLC in Pennsylvania you need to file the Articles of Dissolution with the Pennsylvania Department of State through mail by paying a filing fee of $70.
Dissolving an LLC in Pennsylvania is a complex process that requires the attention of all parties involved. In order to dissolve an LLC, an individual must obtain a tax clearance certificate, wind up the affairs of the company, and distribute assets. The amount of time required to complete the process will vary depending on the type of business and the status of the organization. However, in most cases, the process takes less than six weeks.
First, the owners of the business must obtain the name of the organization and register it with the Pennsylvania Department of State. This can be done online or in person. After registering the business, the owner must provide the name, address, and phone number of the registered agent. Once the business is registered, the owner will be able to use the company name, although it will no longer be reserved.
Next, the owner must contact the state’s Department of Revenue (DOR) and request a tax clearance certificate for the business. The DOR will issue the certificate if the LLC meets the requirements. If the business is a standard LLC, it may be required to pay one-time fees and periodic ad hoc fees.
When dissolving an LLC, the business must make sure that its accounts are closed and taxes are paid. This includes closing bank accounts, credit cards, and business licenses. Failure to do so will leave the business open to potential legal issues. Also, the state may assess penalties and interest for unpaid taxes. Therefore, it is important to contact all of the state’s tax agencies and clear any outstanding liabilities before dissolving the business.
The owners of the business must ensure that all members of the organization approve the dissolution. In case of a voluntary dissolution, the business affairs will be winded up on a positive note. But if the organization is involuntarily dissolved, the members will be required to sell or distribute the assets of the LLC. They will also have to pay creditors.
To dissolve an LLC, an individual must file a Certificate of Dissolution Form with the Department of State. The form is available on the Department of State’s website or can be downloaded. A member must sign the form, and it must include a date and mailing address. There is no specific fee for filing the form, but a minimum of $70 is required to process the documents.
Once all the required documentation is in place, the PA Department of State will process the form within 7 to 10 business days. It is also possible to expedite the dissolution process by making an in-person submission. Additional costs are incurred if certified copies are needed. Regardless of the process used, the final results should be recorded in minutes of the board meeting.
Lastly, the business should notify all its creditors of the dissolution. This allows them to have a chance to object and prevent the organization from being dissolved. If they do not object, the outstanding business debts will be written off.
Yes, in Pennsylvania, there is a fee of $70 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Pennsylvania SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Pennsylvania 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 Pennsylvania. If you have any query do let us know in the comment box.