How to Dissolve an LLC in Indiana? (2024 Updated Guide)
If you're no longer interested in operating your LLC, you'll need to take steps to dissolve the business.
As a certified LLC expert, I will guide you through the Indiana dissolution process and pinpoint the key things you should keep in mind during the procedure.
Here's what you need to know about how to dissolve an LLC in Indiana.
Quick Summary
- To dissolve an LLC in Indiana, follow a series of steps including voting for dissolution, filing articles of dissolution, and distributing assets among members.
- The process begins with a formal vote among LLC members and documenting the decision in line with the operating agreement.
- Given Indiana's 19.6% business failure rate within the first year, slightly below the national 20.8%, LLC owners must understand the dissolution process to effectively manage potential downturns.
- Based on my professional experience, I advocate for a proactive approach to the dissolution process, as it significantly contributes to a smoother transition and closure, reflecting positively on the business's legacy.
6 Steps To Dissolving an LLC in Indiana
Here's a description of the steps you should take to dissolve an Indiana limited liability company.
Step 1: Vote to Dissolve the LLC
The first step in dissolving your Indiana limited liability company is to review your written operating agreement for the correct voting terms.
This document, which all limited liability companies in Indiana are required to have, outlines the voting procedures for dissolution.
In most cases, you'll need the consent and votes of all LLC members before dissolving the business. Once you have the written consent, you can begin taking steps to dissolve the business entity.
Step 2: Notify Creditors About Your LLC's Dissolution
One of the key steps in dissolving an LLC is giving notice to creditors and other claimants. This helps to ensure that all debts and obligations are paid off before the business is officially dissolved.
You'll need to provide notice by publishing a notice in a local newspaper.
During our dissolution process, our notice included the name of the LLC, the date of dissolution, and the name and address of the person authorized to accept claims.
Step 3: File Final Tax Returns and Obtain Tax Clearance
The final step is to obtain a tax clearance certificate from the Indiana Department of Revenue [1].
This certificate verifies that all outstanding taxes have been paid and that the LLC is in good standing with the state.
"To obtain the certificate, you'll need to complete final tax returns and submit a Tax Clearance Application. Once you've taken all of the above steps, you can formally dissolve the limited liability company in Indiana."
-Jon Morgan, Co-Editor & Co-Founder of Venture Smarter
Step 4: File Articles or Certificate of Dissolution
Once you've completed the above steps, you'll need to file the Indiana LLC articles of dissolution with the Indiana Secretary of State [2].
In our case, the articles were signed by a majority of the LLC's members and included the LLC's name, mailing address, and dissolution date.
You can file the articles of dissolution online, by mail, or in person. During our dissolution, we submitted the documents in person and they were approved in a few hours.
If you submit via the SOS website, the online filing fee is $20.
Once the articles of dissolution are filed, your LLC will officially be dissolved.
Step 5: Distribute Assets
In the context of the 13,583 Indiana establishments that closed between March 2021 and March 2022, the distribution of assets after the dissolution of an LLC becomes a critical step [3].
It involves dividing the remaining assets among the members based on their ownership percentages, ensuring a fair and equitable closure to mitigate the impact of business cessation.
During our dissolution, we liquidated assets, settled any outstanding liabilities or debts, and then distributed the proceeds to the members.
It is essential to adhere to the guidelines set in the operating agreement or state law if the agreement is silent on asset distribution.
Proper documentation and transparency in this process are critical to ensure fairness among members and to avoid potential disputes.
Step 6: Close All Accounts and Cancel Licenses and Permits
Once your LLC has been dissolved, you'll need to take care of a few final tasks. Be sure to cancel any business licenses or perm its issued in the business name.
You'll also need to notify the IRS that your Indiana LLC has been dissolved for federal tax purposes. Lastly, you'll need to close any bank accounts in the LLC's name.
Related Articles:
- How to Apply for an LLC in Indiana
- How to Look Up an LLC in Indiana
- Best Registered Agents in Indiana
- Indiana LLC Filing Services
FAQs
How to Dissolve a Foreign LLC in Indiana?
If your LLC is registered in another state, you'll need to follow the dissolution procedures of that state.
Once the LLC is dissolved in the other state, you can file a Certificate of Cancellation with the Indiana Business Services Division to cancel your registration in Indiana.
How Much Does It Cost to Dissolve an LLC in Indiana?
It costs $30 to dissolve an LLC in Indiana by mail and $20 if you file online. The fee covers the filing of the dissolution paperwork.
How Long Does It Take to Dissolve an LLC in Indiana?
It takes 3-5 business days to dissolve an LLC in Indiana if you submit the dissolution papers by mail. Walk-in submissions made before noon are processed the same day.
References:
- https://www.in.gov/dor/business-tax/indiana-tax-clearance/#
- https://forms.in.gov/Download.aspx?id=5550
- https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-IN.pdf
