How to Dissolve an LLC in Tennessee

Dissolving a business often involves complex procedures. However, for a limited liability company in Tennessee, dissolving it takes a handful of paperwork. When an LLC is formed in Tennessee, the owner(s) draft the operating agreement. If the owner(s) decide to dissolve the business, the dissolution takes place following the articles mentioned in the operating agreement.

In this article, LLCBuddy editors shared the ins and outs of dissolving an LLC in Tennessee. LLCs must file the Articles of Dissolution with the Tennessee Secretary of State like the formation certificate was filed at the time of forming an LLC in Tennessee. It takes a few days to process and a handful of fees to be paid to the SOS. Many people hire a professional service to do the paperwork to process it hassle-free.

At the time of forming an LLC, an operating agreement draft must be written. Generally, the process of dissolution takes place following the operating agreement (read: Tennessee LLC operating agreement). Before the dissolution process, there are a few things to consider in the LLC.

First, make sure all the members of the LLC agree 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.

Dissolution of Tennessee LLC requires three broad procedural steps. Having a Tennessee LLC Operating Agreement, closing all the tax accounts, and finally submitting the Articles of Dissolution form to the Tennessee Secretary of State.

Step 1: Follow the LLC Operating Agreement in Tennessee

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 in Tennessee.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. 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 in Tennessee that we strongly recommend for you.

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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 accounts, 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 by the date you have decided to dissolve. All the taxes must be paid in advance so that you don’t face any issues in the 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.

Tax clearance

While dissolving the Tennessee LLC, the owner is not required 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 LLCs that are classified as partnerships is Form 1065, and those LLCs who have registered themselves as corporate should check IRS Form 1120.

BOI Reporting

If you’re going to dissolve your LLC this year, make sure to update your BOI reporting. From January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) implied a rule to all businesses, including LLCs in Tennessee to file the BOI Report. The Beneficial Ownership Information (BOI) in Tennessee is a report that states about in and out of the company. This report must be up-to-date and submitted to the FinCEN before you proceed to the dissolution.

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 Organization. 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 filing by mail, in-person drop, or/and online filing.
You can follow the filing instructions on the official portal so that the steps for dissolution will be easier to complete.
For offline filing, LLCs must download the form and submit it to the Tennessee Secretary of State physical office along with the state filing fee.
If you want to dissolve Tennessee Foreign LLC then look for the Foreign LLC Dissolution process.
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.

Filing	Forms and Details
Online Applications	Cease an LLC Online
Offline Applications	LLC Notice of Dissolution
SOS Contact (if offline application is available)	Corporate Filings, 312 Rosa L. Parks Avenue, 6th Floor, William R. Snodgrass Tower, Nashville, Tennessee 37243
Filing Time	3 to 5 working days
Filing Fee	$20

The LLC you own 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 whether he accepts your expedited dissolutions or not.

Points to Be Noted When Dissolving an LLC in Tennessee

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.

Winding Up

Some purposes of LLC 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 the 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 costs in Tennessee include 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 in the articles of dissolution filing form. Following are the ways to pay for the dissolution,

You can select a payment pick-up option.
There is an option for 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 the state will make.

After Dissolving Your LLC

After you dissolve an LLC in Tennessee, you can reinstate or revive the same within a given time. In Tennessee, the LLC name will be available up to the time till SOS dissolves the LLC completely. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in Tennessee if that is available. According to the Tennessee SOS, you can revive your LLC anytime.

Reasons Behind Dissolving an LLC in Tennessee

People always think they can leave the company without any notice and there will be no issue. But if you have an LLC that you created with a legal obligation, it needs to be ended that way. Yes, if someone will dissolve an LLC in Tennessee, they will have to do it while taking care of the government. For dissolving the company, there is always a reason. The reason can be voluntary or involuntary too. Let’s get to know about the involuntary reasons,

If the company was caught doing illegal business.
If the company’s member died due to some reason or went bankrupt.
The dissolution will be mandatory if the assets of the business are used unwisely.
If the time being of the company was already determined in the will, then the company will go into dissolution at that time.

Top Businesses in Tennessee

With the population of 7,080,262, Tennessee is one of the favorable places to start an LLC. According to several reports, starting an LLC for Real Estate Business can be profitable as various places in the state showed steady growth in this business over the past few years. On the other side, based on the city or region you’re going to start your LLC, you can decide the type of business to start. Following are the top 5 businesses you can start in Tennessee.

Real Estate Business
Home Improvement Contractor
Law Firm
Restaurant
Operations Consulting or Financial Consulting

Tennessee LLC Dissolution Review – A Quick Recap

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 details.

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 Organization: File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.

FAQs

How do I dissolve an LLC in Tennessee?

To dissolve an LLC in Tennessee, you must file a Certificate of Dissolution with the Tennessee Secretary of State.

What is the filing fee to dissolve an LLC in Tennessee?

The filing fee to dissolve an LLC in Tennessee is $20.

How long does it take to dissolve an LLC in Tennessee?

After filing the Certificate of Dissolution, it typically takes about 2-3 business days for the dissolution to be processed by the Tennessee Secretary of State.

Can I voluntarily dissolve my LLC in Tennessee?

Yes, you can voluntarily dissolve your LLC in Tennessee by filing the necessary paperwork with the Secretary of State.

Do I need to notify creditors before dissolving my LLC in Tennessee?

Yes, you are required to notify known creditors of your LLC about the dissolution by mail or other means.

What happens to my LLC’s debts and obligations when I dissolve it in Tennessee?

After the dissolution of an LLC in Tennessee, the LLC remains responsible for any debts and obligations that existed prior to the dissolution.

Can I reinstate a dissolved LLC in Tennessee?

Yes, you can reinstate a dissolved LLC in Tennessee by filing an Application for Reinstatement with the Secretary of State and paying the required fees and penalties.

Does my Tennessee LLC need to be in good standing to dissolve it?

Yes, your LLC must be in good standing with the state of Tennessee in order to dissolve it.

How do I notify the IRS that my LLC is being dissolved in Tennessee?

You can notify the IRS of your LLC’s dissolution by checking the box that indicates the final return on the last tax return filed by the LLC.

Can I dissolve my Tennessee LLC if it has outstanding tax obligations?

Yes, you can dissolve your Tennessee LLC even if it has outstanding tax obligations, but you will still need to settle those obligations with the IRS.

What is the filing fee for dissolving an LLC in Tennessee?

The filing fee for dissolving an LLC in Tennessee is $20.

Can I file the Certificate of Dissolution online in Tennessee?

Yes, you can file the Certificate of Dissolution online through the Tennessee Secretary of State’s website.

Do I need to provide a reason for dissolving my LLC in Tennessee?

No, you do not need to provide a reason for dissolving your LLC in Tennessee.

Am I required to notify creditors of my LLC’s dissolution in Tennessee?

Yes, you are required to notify creditors of your LLC’s dissolution in Tennessee.

Can I reinstate my LLC in Tennessee after it has been dissolved?

Yes, you can reinstate your LLC in Tennessee after it has been dissolved, but you may have to pay additional fees and penalties.

Do I need to file a final tax return for my LLC in Tennessee after dissolution?

Yes, you will need to file a final tax return for your LLC in Tennessee after dissolution.

Can I dissolve my LLC in Tennessee if it has outstanding tax obligations?

Yes, you can dissolve your LLC in Tennessee even if it has outstanding tax obligations, but you will need to address those obligations before dissolution is complete.

What documents do I need to submit with the Certificate of Dissolution in Tennessee?

You typically do not need to submit any additional documents with the Certificate of Dissolution in Tennessee.

Can I dissolve my LLC in Tennessee if it is involved in legal proceedings?

Yes, you can dissolve your LLC in Tennessee even if it is involved in legal proceedings, but you should consult with an attorney to ensure all legal matters are properly addressed.

What is the first step to dissolve an LLC in Tennessee?

The first step to dissolve an LLC in Tennessee is to hold a meeting of the members and vote to dissolve the LLC.

Can I dissolve my LLC in Tennessee if it has employees?

Yes, you can dissolve your LLC in Tennessee even if it has employees, but you must follow all applicable state and federal laws regarding employee termination.

Is there a publication requirement for dissolving an LLC in Tennessee?

No, there is no publication requirement for dissolving an LLC in Tennessee.

Can I transfer assets out of my LLC before dissolving it in Tennessee?

Yes, you can transfer assets out of your LLC before dissolving it in Tennessee, but you must ensure that all transfers are done legally and do not result in fraudulent conveyance.

Can I dissolve my LLC in Tennessee if it is involved in a lawsuit?

Yes, you can dissolve your LLC in Tennessee even if it is involved in a lawsuit, but you should consult with legal counsel to address any pending legal matters.

Can I dissolve my LLC in Tennessee if it has outstanding debts?

Yes, you can dissolve your LLC in Tennessee even if it has outstanding debts, but you will remain personally liable for those debts if they are not paid.

What is the statute of limitations for dissolving an LLC in Tennessee?

There is no specific statute of limitations for dissolving an LLC in Tennessee, but it is recommended to dissolve the LLC as soon as possible after it ceases operations.

Can I dissolve my LLC in Tennessee if it is inactive?

Yes, you can dissolve your LLC in Tennessee if it is inactive, but you must still follow the official dissolution process with the Secretary of State.

Can I transfer ownership of my LLC before dissolving it in Tennessee?

Yes, you can transfer ownership of your LLC before dissolving it in Tennessee, but all transfers must be recorded and comply with the operating agreement.

Do I need to notify the Tennessee Department of Revenue when dissolving my LLC?

Yes, you should notify the Tennessee Department of Revenue when dissolving your LLC to ensure all tax matters are properly handled.

Can I dissolve my LLC in Tennessee if it has multiple members?

Yes, you can dissolve your LLC in Tennessee if it has multiple members, but all members must agree to the dissolution.

In Conclusion

Dissolving a business is not an easy task as a lot of homework is involved with the process. The official process might have only a few steps, however, before and after dissolving the LLC, there might be a lot of other tasks. In this case, it is highly recommended to get a professional service. If you are looking to file an LLC at $0, then ZenBusiness is your answer.

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. This article shared the general steps. Let us know if you have any queries.