To dissolve a limited liability company one has to take up a set of required steps. In Washington State, 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 Washington State, 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 Washington State LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of Washington State 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 Washington State LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Washington State
- After Dissolving Your LLC
- Reasons Behind Dissolving Washington State LLC
- Washington State LLC Dissolution Review
How to Dissolve an LLC in Washington State
Dissolution of Washington LLC requires three broad procedural steps. Having a Washington LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the Washington Secretary of State.
Step 1: Follow Your Washington State 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 Washington State 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 Washington State 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 Washington State Articles of Organization, one has to file Washington State 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 Washington 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 Washington 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
Secretary of State Corporation Division
801 Capitol Way S
PO Box 40234
Olympia WA 98504-0234
Online FIling: Washington State Online LLC Dissolution
Filing Fee: $20 (Online), None (By Mail)
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 Washington State LLC
Apart from these three steps, no major dissolution rules are there in Washington State. 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 Washington State includes the formation as well as dissolution fees. To dissolve an LLC in Washington State, 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 Washington State 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 Washington State. A registered agent can help you do the needful.
Reasons Behind Dissolving Washington State LLC
To make the dissolution of the company successful, the owners or the members of the company must do it legally. Without the legal actions and fulfilling the obligations, the company cannot turn dissolved. So, if you need to dissolve an LLC in Washington State, be sure to consider all the government’s duties and obligations. Okay, now we know it is essential, but what is the reason for that? Let’s check them out!
- The business is not able to cope up with the losses.
- It can also depend on the will of the company owners if they don’t want to continue.
- The business is not that good like it was in the past.
- The clients are shifting to other brands of the products.
- The company is not paying the taxes, honestly.
Top Businesses in Washington State!
To start an LLC in Washington state, the person needs to gather all information that he can. The data will allow that person to be able to make the best decision based on interest too. People cannot just get into the facts of creating a business, and they need to research it. So that is pretty much why we have provided you with the information below. Use that and understand which industry is better for your new LLC.
- Information: If we check out Washington’s economy, it is filled with funds from this sector. The contribution is $103.88 billion, and that helps the state a lot. People in the industry are the ones that have a pool of information regarding this industry. It is only information and communication technology that has brought us a lot of great aspects.
- Finance industry: The finance and insurance industry contributes $89.57 billion to the GDP of Washington state. The state is home to many banking and insurance companies, which have an astonishing reputation too.
- Manufacturing: No other industry adds value to the material that is of no use at the initial stage. So if the industry can do that, how can it leave the development of the state behind. The industry taps the GDP with a contribution of $56.91 billion too. There are so many products that the state is known for and one of them is processed food. There is a significant contribution in the aircraft and space industry of this sector too.
Washington State LLC Dissolution Review
Time needed: 5 minutes
Here’s a recap of the steps you must follow when dissolving your Washington State LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your Washington State 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.
Yes, in Washington State, there is a fee of $20 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the Washington State SOS.
No, there is no requirement of revenue department clearance till the time the SOS of Washington State 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.
What is the Cost to Dissolve an LLC in Washington
To dissolve an LLC in Washington you need to file the Certificate of Dissolution with the Washington Secretary of State Corporation Division through mail, in-person free of cost or online by paying a filing fee of $20.
Dissolving an LLC in Washington entails several costs, some of which are relatively fixed and others that may greatly vary based on the unique circumstances of each business. To start, mandatory filings with the state government entail a base fee which has to be submitted along with the necessary paperwork. This base fee covers the administrative processing involving the dissolution of an LLC. However, it is important to note that fulfilling obligations with government authorities is just one aspect of the overall dissolution process, and there are many more costs to factor in.
Most LLCs are likely to have ongoing contractual commitments, such as leases, service agreements, or loans. The dissolution of an LLC in Washington does not absolve the business from fulfilling these outstanding contractual obligations. Consequently, settling these commitments may involve further costs, which can significantly impact the financial landscape for the business owner. Lease agreements, for instance, may impose penalties for breaking the lease prematurely, potentially leading to additional financial burdens. Similarly, loans may need to be repaid, which could involve early repayment fees or the potential need to liquidate assets to cover outstanding debts.
Another factor that plays an important role in calculating the costs associated with dissolving an LLC is taxation. While Washington does not impose a state-level income tax, businesses may still be liable for certain taxes as part of the dissolution process. Closing duties may include filing final tax returns, paying any business and excise taxes owed, as well as potential registration renewal fees. It is paramount that entrepreneurs consult with tax advisors or appropriate professionals to better understand the implications and obligations tied to taxation in their unique dissolution circumstances.
Additionally, it is worth mentioning the intangible costs that may come into play when considering the dissolution of an LLC. For many business owners, dissolving a company represents not just the end of a professional venture, but also the shelving of their dreams, aspirations, and potentially valuable relationships. The emotional toll that saying goodbye to employees, clients, or partners can take, cannot be overlooked. While not understood in monetary terms, these intangible costs must be recognized for their significance.
Ultimately, every situation presents a distinctive array of costs associated with the dissolution process, and quantifying a generic available figure is almost impossible. The expenses tied to dissolving an LLC in Washington depend heavily on the unique circumstances, contractual obligations, tax obligations, and individual interpretations of the costs incurred. Understanding, planning, and ultimately mitigating these costs is fundamental for business owners preparing to embark on the complex journey of dissolving their LLCs.
It is important for entrepreneurs considering the dissolution of their LLCs to recognize and account for the potential financial strains associated with this decision. Engaging financial advisors, accountants, legal professionals, and tax experts is crucial. The upfront investment of seeking professional assistance shall ensure that entrepreneurs prepare effectively, navigate the complexities of their unique situation, and potentially minimize the costs incurred during the dissolution process.
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 Washington State. If you have any query do let us know in the comment box.