How to Dissolve an LLC in Alaska? (Easiest Way Possible)
Like all businesses, there are times when an Alaska LLC will need to be dissolved.
Having guided numerous clients through the complexities of LLCs, I embarked on a comprehensive research journey to find the easiest and most effective way to dissolve an LLC in Alaska.
I spent countless hours studying legal guidelines and consulting experts in the field, including experienced attorneys and business professionals.
In this article, I'll share my in-depth knowledge, offering step-by-step instructions and expert insights to help you navigate the dissolution process effortlessly.
Quick Summary
- To dissolve an LLC in Alaska, hold a meeting with members, settle debts, and file a Certificate of Dissolution with the state.
- Notify creditors, close business tax accounts, inform employees, wind down operations, and follow legal requirements.
- The steps for dissolution become critically important in light of data from Lending Tree, which shows that 24.1% of businesses in Alaska do not survive their first year. This highlights the essential need for LLC owners to be thoroughly prepared.
- I always recommend consulting with experts or using Alaska LLC dissolution services for a smooth process.
6 Steps to Dissolving an LLC in Alaska
When dissolving an LLC, you’ll need to follow 6 critical steps below:
1. Vote to Dissolve the LLC
Before initiating the dissolution process, meet with all Alaska LLC members or managers to discuss and mutually agree on the decision.
In our experience, the meeting provided an opportunity to align everyone's expectations and responsibilities during the dissolution process.
If the LLC operating agreement requires unanimous consent for dissolution, obtain written consent from all members before proceeding. Ensure all members are on board with the dissolution of the LLC.
Review the Alaska LLC operating agreement thoroughly and familiarize yourself with Alaska state laws regarding LLC dissolution.
Understanding the specific dissolution provisions in the operating agreement and state laws will guide you through the process.
2. Notify Creditors About Your LLC's Dissolution
With the US Small Business Administration reporting that 1,646 Alaska establishments closed between March 2021 and March 2022, it's crucial when closing an LLC in Alaska to inform all creditors of the dissolution promptly to resolve any remaining debts or claims.
During our dissolution, we did this by sending a certified letter to each creditor. The letter included the date of the dissolution and our contact information.
You must also provide a deadline for creditors to submit their claims.
3. File Final Tax Returns and Obtain Tax Clearance
Prepare and file all necessary tax returns for the LLC, including state and federal tax filings. Address any tax liabilities, ensuring all taxes are paid before dissolving the LLC.
Additionally, you should also close your tax accounts. You can do this by paying your Alaska business tax obligations and filing a final return and related forms.
Complete IRS Form 966 to report the LLC's corporate dissolution or liquidation.
Inform the IRS about the LLC's dissolution by submitting the final tax return and requesting the closure of the Employer Identification Number (EIN) associated with the LLC.
We requested a tax clearance from the Alaska Department of Revenue to verify that all tax obligations were met.
"Settle all business debts and fulfill tax obligations to the State of Alaska before finalizing the dissolution."
- Jon Morgan, CEO, Co-Founder and Editor-in-Chief of Venture Smarter
4. File Articles or Certificate of Dissolution
Filling a Certificate of Dissolution with the Alaska Division of Corporations, Business, and Professional Licensing Corporations is the third step to dissolving your LLC [1].
This can be done online, by mail requiring a credit card payment form, or in person.
This LLC dissolution form is available on the Alaska Division of Corporations website.
We filed the Articles of Dissolution with the Alaska Secretary of State to officially dissolve our Alaska LLC.
The filing fee is $25. You will need the following information to file:
- The Alaska business name and filing number
- The date of dissolution
- The reason for dissolution (e.g., voluntary or involuntary dissolution)
- The signature of a manager, member, or authorized person
If your LLC is required to file an LLC annual report, ensure that the final report is submitted before or along with the dissolution documents.
Compliance with annual reporting requirements is essential for a successful dissolution.
5. Distribute Assets
Once all liabilities are settled, allocate the residual assets among the LLC members according to their respective ownership stakes in the LLC.
In Alaska, barring any different stipulations in the operating agreement, members generally receive asset distributions correlating to their ownership percentages in the LLC.
Compile a comprehensive final accounting report that outlines the process of liquidating assets, clearing debts, and allocating the remaining assets. This report should be distributed to all members of the LLC for full transparency.
During our finalization of this step, we distributed a Schedule K-1 form to each LLC member, detailing their share of the LLC’s income, deductions, and credits for the last operational year of our LLC.
6: Close All Accounts and Cancel Licenses and Permits
Lastly, notify any other regulatory agencies or entities that the LLC had interactions with during its operation. Cancel any permits or Alaska business licenses associated with the LLC.
As part of the Alaska business dissolution process, also close the LLC's business bank accounts and address any remaining financial matters related to the dissolution.
Taking these steps will dissolve your Alaska LLC. Once the LLC is dissolved, its members are no longer liable for the Alaska business debts and obligations.
However, it's important to note that dissolving an LLC does not release members from the guarantees or contracts they signed in their capacity.
In our case, we also completed the LLC's payroll obligations, including the payment of final wages, vacation pay, and other accrued benefits. We issued final paychecks to employees and provided them with the necessary tax documentation.
Finally, safely store and retain employee records, including payroll records, tax forms, and personnel files, by state and federal laws.
FAQs
How Long Does It Take to Dissolve an LLC in Alaska?
It takes approximately 10-15 business days to dissolve an LLC in Alaska, including additional mailing time.
How Much Does It Cost to Dissolve an LLC in Alaska?
It costs $25 to dissolve an LLC in Alaska. The filing fee covers the processing of the Dissolution LLC forms.
Can I Reinstate a Dissolved LLC in Alaska?
Yes, you can reinstate a dissolved LLC in Alaska within two years following the dissolution by filing the missed biennial report. Alaska does not have a reinstatement form.
References:
1. https://www.commerce.alaska.gov/web/Portals/5/pub/08-490.pdf
