This article will explore how to dissolve an LLC in Iowa. It includes how to get started and what steps need to be taken to dissolve an LLC in Iowa.
If you consider dissolving your company, you must understand how it works and how long it can take.
It doesn't matter if you're starting or have been operating as a business owner for years.
It would be best to consider all your options before taking action involving your company's future.
How to Dissolve an LLC in Iowa
In Iowa, the process of LLC dissolution is relatively straightforward.
It is common for dissolution steps to be included in the Iowa LLC operating agreement.
- The first step is to notify all company members and have a dissolution vote. Once the vote of all LLC members has been taken, articles of dissolution must be prepared and filed with the State.
- The next stage is to count the LLC assets and divide them among the stakeholders and members. After getting the unanimous consent, you will choose a formal date of dissolution.
- The duration of this process differs depending on many factors. For example, it takes time to gather all the required signatures and file the articles of dissolution. You also need to update the business entity directory.
- In most cases, dissolving an Iowa LLC will take around 60 days. This period includes the gathering of the paperwork. Secretary of State's staff usually processes the dissolution within 2-3 days, depending on how busy they are. Bear in mind that there will be filing fees to the Secretary of State.
If questions come up about the process or you need help preparing your articles of dissolution, please consult with an attorney.
Similar Article: Starting an LLC in Iowa
What Documents Do I Need to File to Dissolve an Iowa LLC?
- A Statement of Dissolution and Termination
To formally dissolve your limited liability company, file a statement of dissolution and termination. You file the dissolution form with the Iowa Secretary of State, Business Services Division. The filing fee is $5. When you file these statements, the status of your LLC as a business entity is formally terminated. This administrative procedure is required to terminate the LLC's liabilities.
- A Written Notice to the Creditors
Before Iowa LLC's dissolution, you are responsible for completing the necessary steps to notify creditors. Send out a written notice with a mailing address if any claims against the LLC are sent.
- No Need to File a Tax Clearance in Iowa, but…
You do not need to file a tax clearance certificate in Iowa. Please note that if you do not adequately dissolve your Iowa LLC with the Secretary of State, there is a chance you might have financial penalties for not filing your biennial report in time.
- Lose of the Unique Name
As a result of the dissolution, your unique business name will no longer be protected. Other business entities will be able to use it.
- Finish up all the Business Matters and the Statement of Termination
You'll need to wind up your business matters after submitting the Statement of Dissolution. After you've completed your work, you'll need to file a Statement of Termination. This document requires the same information as the Statement of Dissolution and has filing instructions, fees, and turnaround times.
- Professional Legal Help
We understand how daunting and irritating the Iowa LLC dissolution process can be for someone winding down an LLC's operation. Collaborate with a professional who will handle all parts of dissolving your Iowa LLC for you to save the headaches.
Pay all the Taxes and Business Debts
When you dissolve your business in Iowa, it means that the legal existence of the domestic LLC ends.
It also means that it no longer owns assets or conducts business activities. Paying outstanding taxes on time is essential for several reasons:
- To avoid penalties and fines;
- To protect the LLC's good standing with the State; and
- To clear any debt liabilities
Don't forget to close your business tax accounts during the process of dissolving your Iowa limited liability company.
You can have in mind your operating agreement when closing your various tax accounts.
Many Iowa LLCs have more than one account.
Contact your local law office if you need any help closing your tax accounts. Lawyers will help you avoid any legal issues and fill out all the official paperwork.
Forced Iowa LLC Dissolution
If you forget to submit a biennial report more than 60 days past its due date, the Iowa Secretary of State may involuntarily dissolve your LLC.
In addition, the State may also dissolve your LLC if you fail to pay any fee, tax, or penalty assessed upon your LLC by the State.
Finally, if you do not designate or maintain a registered agent or office for 60 days, the State may dissolve your LLC.
In this State, reinstatement of limited liability companies costs only $5 (plus any back fees, taxes, or penalties), so getting it back up and running isn't that difficult.
Operating your business in such a way that the State dissolves it against your will is never a good idea.
How to Dissolve a Foreign LLC in Iowa?
The dissolution process for this LLC operating in Iowa is identical to a domestic Iowa LLC.
To dissolve and terminate your LLC, follow the procedures mentioned above.
Is It Hard to Dissolve an Iowa LLC?
If something happens and you decide to dissolve your Iowa LLC, you file a Statement of Dissolution with the Iowa Secretary of State's Business Services Division (SOS).
An SOS form is not available when it comes to Iowa LLC dissolution.
The statement should include the company's name and the fact that it has been dissolved.
Your LLC will continue to exist after you file the dissolution statement. It will exist only to wind up its affairs.
What Is the Difference Between Dissolving, Terminating, and Winding up an LLC?
Many people mix up dissolution and termination. An LLC's existence does not end with its dissolution.
A dissolution changes the purpose for which an LLC exists.
A dissolved LLC operates solely for the purpose of winding up and liquidating, rather than doing whatever business it did previously.
Winding up is a complicated but necessary task. It includes these three main steps:
- Discharging the LLC's debts, obligations, and other liabilities
- Settling and closing the LLC's activities and affairs
- Distributing the remaining assets
It may appear that dissolving an Iowa LLC is a complex task, but it is not as complex as it seems if you follow these few simple procedures.
Some basic administrative tasks are required to dissolve your company in the State of Iowa.
After collecting the paperwork and submitting it to the Iowa Secretary of state office, you wait for final approval.
Before the dissolution is finalized, you must take care of any outstanding taxes or debts owed by the business.
Due to the many rules and possible mistakes, LLC owners hire a lawyer.
A lawyer can give legal advice about the internal revenue service and tax obligations.