There are many reasons why you might want to dissolve your Kentucky LLC. Perhaps the company is no longer profitable, or maybe there is a change in management, and it's time for someone else to take over.
Since many entrepreneurs often struggle with the nuances of this process, down below, you can find all of the information you might need to do it properly.
How Do You Dissolve a Kentucky Limited Liability Company?
To dissolve a domestic Kentucky LLC, you must complete the following steps:
Step 1: Follow your Kentucky LLC Operating Agreement
Gather all of the LLC's important documents, such as Kentucky LLC articles of organization and Kentucky LLC operating agreement, and then follow the procedure outlined in those documents.
Notify all of your LLC members about what you've done and distribute any remaining business assets to them accordingly (unless otherwise stated in the operating agreement).
Step 2: Close Business Tax Accounts
You need to make sure that your limited liability company is in good standing. This means that there are no remaining business debts, all of its annual reports have been filed, and it is up to date on its taxes.
You can check this by visiting the Kentucky Secretary of State's website. You should file a final tax return with both Kentucky and the federal government.
Step 3: File Articles of Dissolution
Articles of dissolution need to be filed with the Kentucky Secretary of State. This document will outline the reason for dissolving the LLC, as well as any other relevant information.
Once you've completed these steps, your Kentucky LLC will be dissolved.
How to Dissolve a Foreign LLC in Kentucky?
You can also dissolve foreign LLCs qualified to do business in the state.
The process for dissolving these business entities can be broken down into six parts:
- Gather all of your foreign company documents and follow any procedure outlined within those documents (e.g., dissolution procedures).
- Once this is done, notify all members of your LLC about what you've done.
- Distribute any remaining assets to LLC members accordingly
- Close all business tax accounts for your LLC, including those with Kentucky and federal agencies.
- File articles of dissolution with the Secretary of State where your LLC was formed.
- Send a final tax return to the foreign LLC's country of formation.
Once you've completed all these steps, your foreign business entity will be dissolved.
What Do I Have to Do Before I Dissolve a Kentucky LLC?
There are a few things you should do before dissolving your Kentucky LLC:
- Update all of your company's contact information with the Kentucky Secretary of State. This includes your Kentucky registered agent, office address, and officers (if applicable).
- Hold a member meeting to establish the dissolution of your Kentucky LLC.
- Ensure you have paid all of your tax obligations (unemployment insurance tax, employee withholding tax), filed all required annual reports, and paid a corresponding filing fee.
- If you are dissolving your LLC for any reason other than retirement, make sure you have a plan in place for winding down company operations. This usually includes notifying customers and suppliers and settling any outstanding debts.
Once you've taken care of all these items, you're ready to dissolve your Kentucky limited liability company.
What Do I Have to Do After I Dissolve a Kentucky LLC?
There are several things you need to do after the dissolution process has ended, including:
- Close all business bank accounts for your Kentucky LLC.
- Cancel any local licenses and permits you may have had.
- File Form 966 with the US Internal Revenue Service
- Cancel the IRS account linked with the KY LLC's Federal Tax ID (EIN)
Finally, you should take some time to reflect on what went well and what could have been done better during your LLC's tenure. This can help you learn from your experiences and apply those lessons to future business ventures.
How Long Does It Take To Dissolve a Kentucky LLC?
It takes about 3-5 business days for the Kentucky state government to process the Articles of Dissolution. The exact timeframe from start to finish depends on a few factors, such as how busy the Secretary of State's office is and how quickly you complete the necessary paperwork.
How Much Does It Cost to Dissolve an LLC in Kentucky?
It costs about $40 to file the articles of dissolution. Filing fees include a check made payable to Kentucky State Treasurer. The overall cost of dissolving a Kentucky LLC varies depending on the case.
How Long Before Someone Can Use My LLC Name in Kentucky After I Dissolve?
A Kentucky LLC business name can be used after it's dissolved by the Kentucky Department of State. Your business name is not protected after dissolution.
What Is the Penalty if You Don't File Your Annual Report/Statement?
In Kentucky, late fees are not charged for failure to submit an annual report. The state, on the other hand, the state has the authority to administratively dissolve a domestic (in-state) entity or revoke a foreign (formed in another state) entity's right to transact business if it fails to comply with the June 30 due date.
Do You Need a Department of Revenue Clearance Before the Kentucky Secretary of State Will Accept Your Dissolution?
You do not need to obtain a Department of Revenue clearance to dissolve your LLC.
Do I Have to Publish a Notice of Dissolution of the Kentucky LLC?
No, you are not required to publish a notice of dissolution of the Kentucky LLC. However, it is advisable to do so in order to provide notice to creditors and other interested parties of the dissolution of the company.
Dissolving Kentucky LLCs can be a cumbersome endeavor. Before you start the process, make sure that all company members agree to dissolve it and have obtained copies of any necessary documentation for their personal use following its termination.
After the dissolution has been completed, be aware that some states may require annual filings even after they are no longer active entities. These requirements vary by state, so you should seek legal advice or consult your local Secretary of State office for any additional questions.