If you have decided to dissolve your LLC in Connecticut, the process is relatively simple as long as you comply with statutory requirements.
As a business consultant for limited liability companies, I gained over a decade of experience helping clients and addressing their concerns regarding LLC formation.
That said, I’ll provide you the ways you could dissolve a Connecticut LLC. The article is backed with in-depth research and legal advice from our team of attorneys.
Quick Summary
- To dissolve an LLC in Connecticut, consult your operating agreement and follow state requirements.
- A Connecticut LLC may be voluntarily dissolved due to completion of the business, termination of a project and members’ personal decisions.
- Involuntary dissolution can be administrative or judicial.
Steps to Dissolving an LLC in Connecticut
The steps to dissolving an LLC in Connecticut should be followed in order for your business to be legally terminated.
You must follow the procedures outlined in the operating agreement or in the Connecticut Limited Liability Company Act.
Here are the steps to dissolve an LLC in Connecticut:
1. Notify LLC members and service providers
Notify all members of the LLC and its service providers including banks or other financial institutions about the dissolution. You must provide the members with a copy of the dissolution notice, which is a document that states the LLC's intent to dissolve.
2. Follow Your Connecticut LLC Operating Agreement
Connecticut LLC operating agreement outlines the provisions about the dissolution process. It is important to follow these provisions to the letter.
If your operating agreement does not contain information about dissolution, then you will need to follow the Connecticut Limited Liability Company Act.
The Connecticut LLC operating agreement requires a dissolution meeting to be held where members decide and vote on closing the business.
It is important to note that LLCs are not required to have an operating agreement. However, if you do have one, it is crucial that you follow it.
A Connecticut LLC operating agreement will also have provisions about distributing assets in case of dissolution.
After LLC assets are used to pay off creditors, the remaining assets will be distributed among the LLC members in accordance with their ownership interests.
3. Close All Business Accounts
Close all business accounts including LLC bank accounts, credit cards, and other records associated with the LLC.
To close a business bank account, you'll need to provide the bank with a letter signed by all LLC members and provide the formal date on which it will be closed. The bank may also require a copy of the dissolution certificate.
4. Close Various Tax Accounts
The Connecticut Department of Revenue Services doesn't require Connecticut LLCs to obtain tax clearance before the dissolution.
However, you should close your business entity tax account with the state for the dissolution to be approved.
To close your LLC's sales and use tax account (if you sell taxable goods), you'll need to call the Department of Revenue Services and request a final return be filed for your LLC.
Include the effective date of the dissolution and the reason for dissolution on the final return.
Read our article and learn more about LLC taxes in Connecticut.
5. File LLC Articles of Dissolution
The final step in dissolving your LLC is to file Articles of Dissolution with the Connecticut Secretary of State, Commercial Recording Division [1].
This form can be found on the Connecticut Secretary of State's website and must be submitted either by mail or in person.
The Certificate of Dissolution form should contain your business name, mailing address, Connecticut registered agent information, and the effective date of dissolution. You will also need to sign and date the form.
Once the Articles of Dissolution are filed, your LLC will be officially dissolved, and all business activity must cease.
Reasons to Dissolve an LLC
The reasons to dissolve an LLC may be due to voluntary or involuntary dissolution.
1. Voluntary Dissolution of a Connecticut LLC
Voluntary dissolution of a Connecticut LLC may be due to the following reasons:
- Business is completed
- Project is terminated
- Members’ personal decisions
- The LLC is no longer viable
2. Involuntary Dissolution of a Connecticut LLC
Involuntary dissolution is sanctioned by the state or ordered by the court. Business entities can be administratively or judicially dissolved.
Administrative dissolution may be due to the following reasons:
- Nonpayment of franchise tax
- Failure to file Connecticut LLC annual reports
- Absence of a registered agent
If your Connecticut LLC has been administratively dissolved, you can reinstate the business by resolving the grounds for dissolution.
Judicial dissolution may be due to the following reasons:
- Lawsuits against the company
- Operating illegally
- Fraud
FAQs
How Long Does It Take To Dissolve a Connecticut LLC?
It takes around one week to dissolve a Connecticut LLC. However, if you file an expedited service request form, you can shorten the processing time by half.
Can I Dissolve a Foreign LLC in Connecticut?
You can dissolve a foreign LLC in Connecticut by filing the Certificate of Withdrawal with the Connecticut Commercial Recording Division.
How Much Does It Cost to Dissolve an LLC in Connecticut?
It costs $0 to dissolve an LLC in Connecticut. However, higher fees apply if you hire a professional service provider. You can avail for expedited processing for an additional $50.
Can I Re-Register a Connecticut LLC After Dissolution?
You can re-register a Connecticut LLC after dissolution by submitting a completed Reinstatement Package and an annual report, paying a filing fee of $120 and paying penalties owed.
Dissolving a Connecticut LLC
Dissolving a Connecticut LLC legally can be accomplished by following the steps outlined above.
If you need assistance filing the necessary paperwork or have any other questions about dissolving your LLC, it is better to book a professional service such as IncFile to streamline the procedure.
A qualified lawyer will be able to guide you through the process and ensure that all necessary paperwork is filed correctly.
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References:
- https://portal.ct.gov/-/media/SOTS/Business-Services/BSD-Forms/llc-2017/certificate_of_dissolution.pdf
