To dissolve a limited liability company one has to take up a set of required steps. In Tennessee, 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 Tennessee, 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 Tennessee (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Tennessee 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 Tennessee LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Tennessee
- After Dissolving Your LLC
- Reasons Behind Dissolving Tennessee LLC
- Tennessee LLC Dissolution Review
How to Dissolve an LLC in Tennessee
Dissolution of Tennessee LLC requires three broad procedural steps. Having an Tennessee LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Tennessee Secretary of State.
Step 1: Follow Your Tennessee 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 Tennessee 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 Tennessee 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 Tennessee Articles of Organization, one has to file Tennessee 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 Tennessee 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 Tennessee 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.
Secretary of State
312 Rosa L. Parks Ave.
6th Floor, William R. Snodgrass Tower
Nashville, TN 37243
Online FIling: Tennessee Online LLC Dissolution
Filing Fee: $20
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 Tennessee LLC
Apart from these three steps, no major dissolution rules are there in Tennessee. 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 Tennessee includes the formation as well as dissolution fees. To dissolve an LLC in Tennessee, LLCs have to file an Article of Dissolution. The filing fee is $20. 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 Tennessee 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 Tennessee. A registered agent can help you do the needful.
Reasons Behind Dissolving Tennessee LLC
Having an LLC is like having the best thing as it has less liability on the person. We have to take care of the only thing that we create legally and dissolve it legally. If the creation needed many documents, then why not do it the same way at dissolution. With the help of an acceptable manner, we don’t have to worry about any legal consequences. But why would someone want to dissolve an LLC in Tennessee? Let’s see some reasons here,
- The business is not getting better profits like before.
- The customer needs are increasing, and it is not possible to quench their need.
- The owners are under great stress because of the debts.
- Impossible to cope up with the needs of business staff.
- Too many companies in the competition.
Top Businesses in Tennessee!
If someone is living in Tennessee, they are in for their best life. But to have the best life, people like to start an LLC in Tennessee. But to be able to have a business, it is imperative to know the perfect way to start it. The ideal way is to know about the top industries in the state. Here, let us drive you through that information,
- Finance industry: It is an essential sector for the state as it provides a lot of help to the people in finance. Mostly it is the real estate and banking sectors that fuel up the industry with money. This particular sector is responsible for the contribution of $52.59 billion to the GDP too.
- Manufacturing: There is a lot that this industry has contributed to the economy. If we show it in amounts, then it is $47.63 billion. The main thing that this industry is known for is processed foods, beverages like beer, whiskey, soft drinks, etc. There are more like transportation equipment, automobile parts, chemicals, plastics, pharmaceuticals, etc. All these things are manufactured in Tennessee, and there are even more of these. It is all about how this sector provides jobs and ensures safer development.
- Professional services: There are many health care centers, large hospitals, colleges of medicines and more, that make this industry whole. The state has made a great contribution to the GDP with the amount of $39.78 billion. It is an important sector and is providing a lot to the economy with it.
Tennessee LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your Tennessee LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Tennessee 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 Tennessee
To dissolve an LLC in Tennessee you need to file the Articles of Termination with the Tennessee Secretary of State through mail or online by paying a filing fee of $20.
When an LLC is no longer needed or wanted, it must be dissolved to close it out. Dissolving involves a few steps to make sure all business debts are paid off and all business operations are wound down appropriately. The cost to dissolve an LLC in Tennessee will depend on a few factors, including whether the LLC is registered in Tennessee and the complexity of the dissolution process.
The first step to dissolving an LLC in Tennessee is to file a Certificate of Dissolution with the Tennessee Secretary of State. The filing fee is currently $50, and the form is available on the Secretary of State’s website. The Certificate of Dissolution should include the name and address of the LLC, the date of dissolution, and the name and address of the LLC’s registered agent. Once the form is filed, the LLC’s name will be removed from the business registry and the LLC will no longer be recognized as a legal entity.
After filing the Certificate of Dissolution, the LLC must notify all creditors, employees, and other interested parties of the dissolution. This notification is usually done by sending a letter to each party notifying them of the dissolution. The notification should include the date of dissolution and instructions on how to file claims against the LLC for any unpaid debts. The LLC is still liable for any debts incurred prior to the date of dissolution, so it is important to ensure all debts are paid off before filing the Certificate of Dissolution.
The next step is to collect all assets of the LLC and distribute them to the members or owners. If the LLC has any real estate, the title must be transferred to the appropriate parties. If the LLC has any outstanding debts, they must be paid off before any assets are distributed. After the assets are collected and distributed, the LLC should close out any bank accounts or other financial accounts associated with the business.
Finally, the LLC must file a final tax return with the state of Tennessee. The filing fee for the final tax return will vary depending on the state, but is typically a few hundred dollars. The LLC should also make sure to pay any remaining taxes, fees, or other obligations before filing the final tax return.
The cost to dissolve an LLC in Tennessee will depend on the complexity of the dissolution process and the amount of paperwork and filing fees required. All taxes and fees must be paid before the dissolution process is complete, so the total cost may be higher than the filing fee for the Certificate of Dissolution. In addition, the LLC may need to hire legal or accounting services to help with the dissolution process, which could add to the total cost.
Yes, in Tennessee, there is a fee of $20 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Tennessee SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Tennessee 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 Tennessee. If you have any query do let us know in the comment box.