To dissolve a limited liability company one has to take up a set of required steps. In Rhode Island, 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 Rhode Island, 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 Rhode Island LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Rhode Island 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 Rhode Island LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Rhode Island
- After Dissolving Your LLC
- Reasons Behind Dissolving Rhode Island LLC
- Rhode Island LLC Dissolution Review
How to Dissolve an LLC in Rhode Island
Dissolution of Rhode Island LLC requires three broad procedural steps. Having a Rhode Island LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Rhode Island Secretary of State.
Step 1: Follow Your Rhode Island 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 Rhode Island 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 Rhode Island 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 Rhode Island Articles of Organization, one has to file Rhode Island 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 Rhode Island 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 Rhode Island 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.
Division of Business Services
148 W. River Street
Providence, Rhode Island 02904-2615
Filing Fee: $50
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 Rhode Island LLC
Apart from these three steps, no major dissolution rules are there in Rhode Island. 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 Rhode Island includes the formation as well as dissolution fees. To dissolve an LLC in Rhode Island, LLCs have to file an Article of Dissolution. The filing fee is $50. 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 Rhode Island 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 Rhode Island. A registered agent can help you do the needful.
Reasons Behind Dissolving Rhode Island LLC
Having a business on the verge of dissolution is a terrible thing. But for some, it can be a liability that is finally getting off of their shoulders. Just like that, a business can have any reason to dissolve an LLC in Rhode Island with no certain one. In the history of dissolutions, there are plenty of dissolutions that have taken place, and all have different reasons. Let’s take a look at the ones that are mostly it,
- The low profitability of the business or the company.
- The increasing competition in the different companies of the same niche.
- The frequent disagreements between the owners of the company.
- The poor management of the directors of the company is also a key reason for it.
- The poor economy regarding the sector of the business.
- Completion of the contract of the LLC.
Top Businesses in Rhode Island!
Who doesn’t need an excellent opportunity to make more money and be independent? We all do. So in the state of Rhode Island, people can get the opportunity to make a great fortune. So if you need to start an LLC in Rhode Island, you can do it without any difficulty. Check out the different industries that you can go for,
- Real estate industry: People need the best of what they imply, so if they want to buy a place or rent it, they get help from the finance industry. That industry is making a tremendous amount of contribution of $11.8 billion in the economy too. Isn’t that what we need? The state sure does.
- Professional services: There is a need for service daily, and it is the sector we go to. That makes professional and business services very crucial to the state and economy too. It provides the best jobs to the people, and they can also be employed in it for a longer-term. It contributes a lot to the economy, and if we put it in numbers, it is $7.21 billion.
- Health care: The people who need assistance for their health or educational services can get to this sector. Both these things are important for a person, so it is a sector that cannot be eliminated. The contribution that this sector makes is $6.79 billion in amount.
Rhode Island LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Rhode Island LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Rhode Island 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 Rhode Island
To dissolve an LLC in Rhode Island you need to file the Articles of Dissolution with the Rhode Island Division of Business Services through mail by paying a filing fee of $50.
The cost to dissolve an LLC in Rhode Island depends on a few factors. The most important factor is whether the LLC was created as a domestic or a foreign company. Domestic LLCs are created in Rhode Island, while foreign LLCs are created in another state but registered to do business in Rhode Island. The cost to dissolve a domestic LLC is much less expensive than the cost to dissolve a foreign LLC.
The first step in dissolving an LLC in Rhode Island is to file the LLC’s Articles of Dissolution with the Rhode Island Secretary of State. The filing fee for Articles of Dissolution for a domestic LLC is $50. For a foreign LLC, the filing fee is $150.
Once the Articles of Dissolution are filed, the LLC must notify all creditors, members, and other parties of its dissolution. This can be done through various means such as an advertisement in a newspaper or an email sent to all known creditors. The cost of notifying creditors and other parties will depend on the method chosen.
The LLC must also file a final federal and state tax return. Even if the LLC has no income, it must file a “zero return” to the IRS and the Rhode Island Department of Revenue. The cost of filing the federal and state tax return will depend on the complexity of the LLC’s finances and the services used to file the returns.
The LLC must also pay any outstanding debts and taxes before it can be dissolved. This includes any taxes due to Rhode Island, such as sales tax or corporate income tax. The cost of settling debts and taxes will depend on the amount owed and the payment methods used.
Once all the debts and taxes are paid, the LLC must distribute any remaining assets to its members. This can include cash, property, or other assets. The cost of distributing assets will depend on the type of assets and the methods used to transfer them.
Finally, the LLC must file a Certificate of Cancellation with the Rhode Island Secretary of State. The filing fee for a Certificate of Cancellation is $20.
In total, the cost to dissolve an LLC in Rhode Island can range from $90 to several hundred dollars, depending on the complexity of the LLC’s finances and the services used to file the documents and settle debts.
Yes, in Rhode Island, there is a fee of $50 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Rhode Island SOS.
No requirement of revenue department clearance is required until the SOS of Rhode Island 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 Rhode Island. If you have any query do let us know in the comment box.