When a Louisiana LLC is no longer needed or wanted, its owners have to take specific steps to dissolve it. This process can be voluntary or involuntary, and there are several reasons business owners might choose to do it.
This article will provide a step-by-step guide on how to dissolve an LLC in Louisiana, as well as the reasons why someone might choose to do so. If you are considering dissolving your LLC, it is important to understand the process and what comes next.
Steps to Dissolving a Lousiana LLC
A Louisiana limited liability company must go through the dissolution process in order to officially terminate. Seven specific steps must be followed in order to formally dissolve an LLC.
Step 1: Notify All Members
The first step in dissolving a Louisiana LLC is to notify all LLC members and designated agents. This can be done by sending them certified mail, a letter, or even giving them a phone call.
The second step is to hold a dissolution meeting. This is where the LLC members will discuss and vote on the proposed dissolution. Most LLC members must approve the dissolution for it to move forward. Sometimes, the dissolution vote doesn't have to be unanimous if the operating agreement allows it.
If there are any disagreements among LLC members, they can file a lawsuit to dissolve the LLC. This is known as a "judicial dissolution."
Step 2: Consult Your LLC Operating Agreement
A Louisiana LLC operating agreement is the governing document of an LLC. It spells out the rules and regulations that govern the company.
If there is no operating agreement, then the Louisiana LLC Act will be used to make decisions about the dissolution.
If your LLC has an operating agreement, you must follow its provisions when dissolving the company.
The operating agreement can include how LLC assets will be distributed and how the dissolution process will work.
It's important to consult your Louisiana LLC operating agreement before taking any further steps to dissolve your LLC.
This document will guide you through the process and ensure that everything is done correctly.
Step 3: Notify LLC Creditors and Lenders
Before a business owner can begin with the Louisiana dissolution process, they must notify all known creditors and lenders. This includes any business debts that need to be paid off, like loans or credit cards.
The business owner must also send a notice of dissolution to any creditors who have open claims against the LLC. These creditors have 180 days from the date of notification to file a claim against the company.
All business debts must be paid off before an LLC can be dissolved. This is to protect the business owners from being personally liable for the company's debts.
If you're not sure whether or not you have any outstanding business debts or contingent liabilities, it's a good idea to consult with a business accountant or attorney. They will be able to help you figure out what needs to be paid.
Step 4: Close LLC Business Accounts
Business entities in Louisiana that no longer want to transact business under their business name must close all business accounts. This includes things like bank accounts, credit cards, and merchant services.
To close a business account, the owner will need to provide the financial institution with a copy of the LLC Certificate of Dissolution from the Louisiana Secretary of State.
Once the account is closed, any remaining assets will be distributed to the LLC members.
It's important to remember that a limited liability company cannot continue to conduct business in Louisiana once it has been dissolved. If the company violates this rule, it could face legal consequences.
Immovable property, such as real estate, must also be transferred to the LLC members or another qualified business entity. This is done by filing a transfer of property form with the Louisiana Secretary of State.
Step 5: Obtain Tax Clearance for the LLC
Tax liabilities must be paid before an LLC can dissolve in Louisiana. This includes minimum business taxes and any various tax accounts that may be outstanding. The easiest way to obtain tax clearance is to request it from the Louisiana Department of Revenue.
An LLC must have a Tax Clearance Certificate before it can be dissolved. The Tax Clearance Certificate verifies that the LLC has no outstanding taxes.
An LLC must pay common taxes before dissolution including income taxes (federal and state), sales taxes on taxable goods, and payroll taxes.
Although an LLC in Louisiana is legally required to get tax clearance, it is advisable to do so because it demonstrates good faith to creditors and other claimants. It will also prevent financial penalties from the state.
Step 6: File Louisiana LLC Articles of Dissolution
Louisana Secretary of State's office requires every Lousiana LLC to file Affidavit to Dissolve Limited Liability Company. A notarized Affidavit will enable you to obtain the Certificate of Dissolution from the state.
The attached affidavit must contain your business name, the formal date dissolution was authorized, and the signature of a company representative.
According to Louisiana state law, the Certificate of Dissolution is your proof that the LLC has been dissolved.
The Secretary of State charges a filing fee of $100 for the Articles of Dissolution.
Reasons to Dissolve an LLC in Louisiana
Louisiana dissolution can happen for several reasons, some of which entail voluntary dissolution while others call for involuntary dissolution. The required steps may differ depending on the situation.
Voluntary Dissolution of an LLC in Louisiana
When LLC owners decide to voluntarily dissolve their entity, it can happen due to several reasons. Most frequently, voluntary dissolution happens when the LLC has fulfilled its stated business purpose as outlined in the articles of organization, and there is no further reason to continue operating.
Other times, the LLC members agree that it would be in their best interest to dissolve the company, or the dissolution is necessary due to state changes.
If owners decide to dissolve the LLC voluntarily, they have to file the official paperwork with the state. This document is called Articles of Dissolution, and it states the reason for the dissolution and other key details such as how assets will be distributed among members.
Involuntary Dissolution of an LLC in Louisiana
When LLCs fail to submit an annual report or otherwise fail to file reports and lose their good standing with the state, the state may involuntarily dissolve the LLC. The state may also dissolve an LLC if it finds that the LLC is operating illegally or has committed fraud.
If your Louisiana LLC is dissolved, you'll no longer be able to conduct business in the state, and your remaining assets will no longer be protected from creditors. To have your Louisiana LLC reinstated, you'll need to file a petition with the state and pay all outstanding fees and penalties.
How Long Does It Take To Dissolve a Louisiana LLC?
Before the Secretary of State files your dissolution papers, the normal processing time is about two weeks.
However, the state can process your dissolution in one to three days if you request expedited processing at an additional fee.
Can I Dissolve a Foreign LLC in Louisiana?
Yes, you can dissolve a foreign LLC in Louisiana. The process is similar to dissolving a domestic LLC, but some additional steps are involved. You will need to file an affidavit of withdrawal with the Secretary of State and publish notice of the dissolution in a local newspaper of general circulation.
How Much Does It Cost to Dissolve an LLC in Louisiana?
How do I close my Louisiana sales tax account?
How Do I Close My Louisiana Sales Tax Account?
To close your Louisiana sales tax account, you'll need to file a final return. IRS Form 720 is used to report final tax liabilities and request your sales tax account termination. The return must be filed within 60 days of dissolving your LLC.
Can I Reinstate a Louisiana LLC?
Yes. You can reinstate a Louisiana LLC if it has been administratively dissolved. The process is relatively simple, and you will need to file Articles of Reinstatement with the Louisiana SOS and pay the applicable fee.
Make sure to provide legal information, such as your business name and the effective date of the reinstatement.
How to Dissolve an LLC in Louisiana: Conclusion
If you are in need of legal assistance to dissolve your LLC in Louisiana, it is best to seek professional help. A professional service provider will guide you through the process and ensure that all necessary paperwork is filed correctly.
Working with an experienced attorney can avoid any potential problems and make the dissolution as smooth as possible.