How to Dissolve an LLC in Kansas? (The MOST Effective Way)
In Kansas, it is required to dissolve a company legally in order to save legal and administrative expenditures.
As a certified business and LLC consultant with over ten years of experience, I will outline the steps necessary to dissolve your business entity in Kansas.
I will also provide some tips on how to ensure that the dissolution process goes as smoothly as possible.
Quick Summary
- To legally dissolve an LLC in Kansas, follow a series of steps including voting for dissolution, notifying creditors, and filing necessary documents.
- It's essential to notify creditors about the dissolution, file final tax returns, and obtain tax clearance from the Kansas Department of Revenue.
- With Kansas ranking in the top ten for business failures at a rate of 24.5%, it's imperative for business owners to be well-versed in the dissolution process to ensure they can close their operations smoothly and mitigate additional risks.
- Personally, I view the dissolution of an LLC not as a failure but as a strategic step that, when executed properly, can pave the way for future opportunities and successes.
6 Steps to Dissolving an LLC in Kansas
Dissolving a limited liability company in Kansas entails following various steps from notifying third parties to filing the dissolution papers.
Here are the steps you should follow to dissolve your Kansas business entity.
Step 1: Vote to Dissolve the LLC
The first step in dissolving an LLC in Kansas involves a formal vote by the LLC members. This is typically done by the operating agreement, which often requires a majority or supermajority vote.
During this process, it's important to document the decision in the form of a written resolution, which serves as a record of the vote.
This step is crucial as it legally initiates the dissolution process and sets the stage for subsequent actions.
From personal experience, ensuring every member's opinion is considered during this vote fosters a sense of fairness and transparency.
Step 2: Notify Creditors About Your LLC's Dissolution
Once the decision to dissolve is made, the next step is to notify all creditors of the LLC's impending dissolution.
This involves sending a formal notice to each creditor, informing them of the dissolution, and providing them with a deadline for submitting claims.
The notice should include the mailing address where claims can be sent and a statement that claims will be barred if not received by the deadline.
During our dissolution, this step was essential to settle all our company debts and avoid legal complications.
3. File Final Tax Returns and Obtain Tax Clearance
Filing final tax returns is a critical step in the dissolution process, underscored by the fact that the US Small Business Administration noted a closure of 8,004 establishments in Kansas from March 2021 to March 2022, highlighting the importance of concluding financial affairs properly [1].
The LLC must file a final tax return with both the IRS and the state of Kansas.
"Obtaining a tax clearance or a certificate of good standing from the Kansas Department of Revenue is necessary to confirm that all tax liabilities have been satisfied."
-Jon Morgan, Co-Editor & Co-Founder of Venture Smarter
This step ensured that our dissolving LLC was in compliance with tax laws and prevented future tax-related issues.
I recommend consulting with a tax professional during this step as this can significantly simplify the process.
Step 4: File Articles of Dissolution
The following step is to file articles of dissolution with the Kansas Secretary of State. The dissolution documents should include the business entity name, the date of the dissolution the reason for dissolving the LLC, and the signature of LLC members and authorized persons [2].
You can file online, by mail, or in person. Online filing will cost you $30 and $35 by mail. If you file by mail, send your completed forms and payment to:
Kansas Office of the Secretary of State
Memorial Hall, 1st Floor
120 SW Tenth Avenue
Topeka, KS 66612-1594
Once the Kansas Secretary of State approves your dissolution, they will send you a confirmation letter. This officially dissolves your LLC in Kansas.
Related Articles:
- How to Start an LLC in Kansas
- How to Look Up an LLC in Kansas
- Top LLC Formation Services in Kansas
- Top Registered Agents in Kansas
Step 5: Distribute Assets
Once all debts and obligations have been settled, the remaining assets of the LLC should be distributed among the members according to their ownership interests.
For our dissolving company, this process involved liquidating any remaining assets, settling any internal accounts, and distributing the proceeds.
It's important to follow the provisions outlined in the operating agreement or state law if the agreement is silent on this matter.
6. Close All Accounts and Cancel Licenses and Permits
The final step in dissolving an LLC in Kansas is to close all business accounts and cancel any licenses or permits. This includes bank accounts, credit lines, and any other financial accounts associated with the LLC.
Additionally, any licenses or permits held by the LLC for business operations should be formally canceled. This step prevents future liabilities and officially concludes the business operations.
During our dissolution, we kept a checklist of all accounts and permits to help ensure that nothing was overlooked during this process.
FAQs
How Long Does It Take to Dissolve an LLC in Kansas?
It takes 2-3 business days to dissolve an LLC in Kansas if you file the Articles of Dissolution by mail. Online filings are approved almost immediately.
How Much Does It Cost to Dissolve an LLC in Kansas?
It costs $35 to dissolve an LLC in Kansas by mail and $30 if you complete the process online. Thie filing fee covers the processing of the dissolution documents.
How Long Before Someone Can Claim My Business Name After Dissolution?
Your business name is available for someone to claim immediately after you dissolve your LLC.
References:
- https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-KS.pdf
- https://sos.ks.gov/forms/business_services/DS.pdf
