How to Dissolve an LLC
To dissolve an LLC, members vote to dissolve under the operating agreement, wind up the business by paying debts and distributing remaining assets, then file Articles or a Certificate of Dissolution with the state, which charges a fee from $0 in states like California and Montana to $220 in Delaware and the District of Columbia. You also file a final tax return and send the IRS a letter to close your EIN account.
By LLC Register · Last reviewed October 1, 2026
Comprehensive Guide
Vote to Dissolve Under Your Operating Agreement
Dissolution starts with a formal decision by the members, following whatever approval threshold your operating agreement sets, commonly a majority or unanimous vote. If the LLC has no operating agreement, your state's default LLC statute sets the required vote. Document the decision in writing and keep it with the LLC's records, since the state filing and your final tax return both rely on there being an actual, authorized decision to dissolve.
Wind Up the LLC's Affairs Before You File
Before filing anything with the state, wind up the business: stop taking on new business, notify known creditors, pay or settle outstanding debts, resolve or terminate ongoing contracts and leases, and distribute any remaining assets to members according to their ownership interests. Most states require this winding-up process to happen before, or alongside, the state dissolution filing, and skipping it can leave members exposed to claims the LLC never resolved.
File Articles or a Certificate of Dissolution With the State
Once the business is wound up, file the dissolution document, commonly called Articles of Dissolution or a Certificate of Dissolution, with the same state agency that approved your original Articles of Organization. This filing formally ends the LLC's legal existence; without it, the state continues to consider the LLC active, which means continuing to owe any annual report fees or franchise taxes even after you've stopped operating.
Dissolution Fees Range From Free to $220
As of late September 2026, filing a dissolution costs nothing in several states, including California, Montana, and Washington, while Delaware and the District of Columbia charge $220, according to each state's filing agency. Most states fall somewhere in between, commonly $25 to $100. Confirm your specific state's current fee and form before filing.
File a Final Tax Return and Close Your IRS Account
Per the IRS, you must file a final federal tax return for the year you close the business, checking the "final return" box on the form that matches your LLC's tax classification: Schedule C for a single-member LLC taxed as a sole proprietor, Form 1065 for a partnership-taxed LLC, or Form 1120 or 1120-S if the LLC elected corporate taxation. If the LLC had employees, file final employment tax returns, make final deposits, and issue final W-2s. Then send a letter to the IRS listing your business name, EIN, business address, and the reason you're closing, to close the EIN's business account; the EIN number itself is never reassigned to a different business.
Cancel Licenses, Permits, and Your Registered Agent Service
After the state approves the dissolution, cancel any business licenses, permits, and your state tax registrations, and end your registered agent service if you used one, since you no longer need an agent for an entity that no longer exists. Keep copies of the approved dissolution filing and final tax returns; most records should be kept for several years in case of a later audit or dispute.
Practical Considerations
Don't Skip Winding Up to File Dissolution Faster
It can be tempting to file the dissolution paperwork right away and deal with remaining debts afterward, but skipping proper winding up can leave members personally exposed to claims from creditors who weren't paid or properly notified, depending on your state's rules. Handle the winding-up steps in the order your state requires, even if it takes longer than filing the paperwork alone.
Good Standing Matters Before You Dissolve
If your LLC has unpaid annual report fees, franchise taxes, or penalties, your state may require you to bring the LLC current before it will accept a dissolution filing. Check your LLC's status with the state before you start, since an LLC that was administratively dissolved for nonpayment may need to be reinstated first before it can be formally, voluntarily dissolved.
Members Can Remain Personally Liable for Skipped Steps
Dissolving the LLC doesn't automatically erase its past debts or legal exposure for actions taken while it operated. Depending on your state and the circumstances, members who distribute assets to themselves before paying known creditors can be held personally liable for those unpaid debts. Talk to a business attorney if the LLC has any outstanding liabilities or disputes before distributing remaining assets.
Keep Records After the LLC Is Gone
Even after dissolution, keep copies of the LLC's formation documents, the dissolution filing, final tax returns, and financial records. These matter if a former client, vendor, or tax authority raises a question years later about a transaction the LLC handled while it was active. This isn't tax advice; talk to a tax professional about how long to retain specific records for your situation.
Sources
The official sources used for this article.
IRS: Closing a business | irs.gov/businesses/small-businesses-self-employed/closing-a-business |
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Delaware Division of Corporations: Fee schedule | corpfiles.delaware.gov/Fee_Schedule/AugustFee2026.pdf |
California Secretary of State: Limited liability companies | sos.ca.gov/business-programs/business-entities/forms/limited-liability-companies-california-domestic |
SBA: Choose a business structure | sba.gov/business-guide/launch-your-business/choose-business-structure |
Created by: LLC RegisterLast reviewed October 1, 2026
Updated: October 1, 2026
Frequently Asked Questions
How much does it cost to dissolve an LLC?
The state filing fee to dissolve an LLC ranges from $0 in states such as California, Montana, and Washington to $220 in Delaware and the District of Columbia, according to each state's filing agency. Most states charge somewhere in between.
Do I need to file a final tax return when I dissolve my LLC?
Yes. Per the IRS, you must file a final return for the year you close the business and check the "final return" box on the applicable form, whether that's Schedule C, Form 1065, or Form 1120 or 1120-S, depending on how the LLC was taxed.
What happens to my EIN when I dissolve my LLC?
The IRS closes the business's EIN account after you send a letter identifying the business name, EIN, address, and reason for closing. The EIN number itself is never reassigned to a different business, even after your account with it is closed.
Can I dissolve an LLC that still owes money to creditors?
You can file the dissolution paperwork, but most states require winding up, including paying or resolving known debts, as part of the process. Distributing remaining assets to members before paying known creditors can expose members to personal liability for those unpaid debts, depending on your state's rules.
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