How to Dissolve an LLC in Louisiana? (Step by Step Guide)
There are several reasons business owners may opt to dissolve a Louisiana LLC. This is referred to as voluntary dissolution, and there are specific steps needed to complete the process.
As part of a team of legal experts with over 10 years of experience, I will provide you with a comprehensive guide on how to dissolve an LLC in Louisiana, as well as the reasons why someone might choose to do so.
- To dissolve an LLC in Louisiana, comply with the operating agreement provisions and adhere to state requirements.
- An LLC in Louisiana may be dissolved based on the decision of the members or due to state sanctions.
- A Louisiana LLC may be dissolved voluntarily by the members or involuntary as sanctioned by the state or court.
Steps to Dissolving a Louisiana LLC
There are specific steps to dissolve limited liability company entities, and they must be followed to formally terminate the business.
Step 1: Notify All Members And Hold a Dissolution Meeting
The first step in dissolving a Louisiana LLC is to notify all LLC members to hold a dissolution meeting. This is where the LLC members will discuss and vote on the motion.
All LLC members must approve the dissolution for it to move forward. However, the dissolution vote doesn't have to be unanimous if the conditions are indicated in the operating agreement.
Step 2: Consult Your Louisiana LLC Operating Agreement
A Louisiana LLC operating agreement is an official internal document of an LLC. It contains the rules and regulations that govern the company.
If there is no operating agreement, then the Louisiana LLC Act will be used to make decisions about the dissolution.
The operating agreement can include how LLC assets will be distributed after dissolution and how the dissolution process will work.
It's important to consult your Louisiana LLC operating agreement and ensure that everything is done correctly, before taking any further steps to dissolve limited liability company you own.
Step 3: Notify LLC Creditors and Lenders
Before a business owner can proceed with the dissolution process, they must notify all known creditors and lenders. These creditors have 180 days from the date of notification to file a claim with the company.
All business debts must be paid off before an LLC can be dissolved. This is to protect the business owners from being personally liable for the company's debts.
If you're not sure if you have any outstanding business debts or contingent liabilities, it's a good idea to consult with a business accountant or attorney to help you figure out what needs to be paid.
Step 4: Close LLC Business Accounts
LLCs in Louisiana that are in the process of dissolution must close all business accounts. These include bank accounts, credit cards, and merchant services.
To close a business account, the owner will need to provide the financial institution with a copy of the LLC Certificate of Dissolution from the Louisiana Secretary of State.
Once the account is closed, any remaining assets will be distributed to the LLC members.
It's important to remember that a limited liability company cannot continue to conduct business in Louisiana once it has been dissolved. If the company violates this rule, it could face legal consequences.
Unliquidated assets, such as real estate, must be legally transferred to the LLC members or another qualified business entity. This is done by filing a transfer of property form with the Louisiana Secretary of State .
Step 5: Obtain Tax Clearance for the LLC
An LLC must have a Tax Clearance Certificate before it can be dissolved.
All tax liabilities must be paid before a limited liability company can be dissolved in Louisiana. These include income taxes (federal and state), sales taxes on taxable goods, and payroll taxes.
Once all outstanding taxes are paid, the company becomes eligible to obtain tax clearance from the Louisiana Department of Revenue.
The Tax Clearance Certificate verifies that the LLC has no outstanding taxes.
Step 6: File Louisiana LLC Articles of Dissolution
The Louisiana Secretary of State office requires every Louisiana LLC to file an Affidavit to Dissolve a Limited Liability Company.
The document will enable you to obtain the Certificate of Dissolution from the state.
The attached affidavit must contain your business name, the formal date the dissolution process was authorized, and the signature of a company representative.
According to Louisiana state law, the Certificate of Dissolution is your proof that the LLC has been dissolved.
The Louisiana Secretary of State charges a filing fee of $100 for the Louisiana LLC Articles of Dissolution.
Reasons to Dissolve a Louisiana Limited Liability Company
Reasons to dissolve a limited liability company are determined by the company's members.
LLC owners may decide to voluntarily dissolve their company due to the following reasons:
- Completion of the business
- The function has been achieved
- Business is no longer profitable
- Disagreements between members
1. Voluntary Dissolution of a Louisiana Limited Liability Company
When LLC owners decide to voluntarily dissolve their entity, it can happen due to several reasons.
Most frequently, voluntary dissolution happens when the LLC has fulfilled its stated business purpose as outlined in the articles of organization, and there is no further reason to continue operating.
Other times, the LLC members agree that it would be in their best interest to dissolve the company, or the dissolution is necessary due to state changes.
If owners decide to dissolve the LLC voluntarily, they have to file the official paperwork with the state.
This document is called the Articles of Dissolution, and it states the reason for the dissolution process and other key details such as how assets will be distributed among members.
2. Involuntary Dissolution of a Louisiana Limited Liability Company
Involuntary dissolution of a Louisiana LLC is executed through Administrative or Judicial Dissolution.
An Administrative Dissolution sanctioned by the Louisiana Secretary of State is due to the following reasons:
- Failure to submit LLC annual reports
- Non-payment of franchise taxes
- Absence of a Louisiana registered agent
To have your Louisiana LLC reinstated, you'll need to file a petition with the state and address the reason the company was dissolved.
A Judicial Dissolution ordered by the court is due to the following reasons:
- Operating illegally
- Committed fraud
If your Louisiana LLC is dissolved, you'll no longer be able to conduct business in the state, and your remaining assets will no longer be protected from creditors.
- Looking Up an LLC in Louisiana
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How Long Does It Take To Dissolve a Louisiana LLC?
It takes about two weeks to dissolve a Louisiana LLC. However, the state can process your dissolution in one to three days if you request expedited processing at an additional fee.
Can I Dissolve a Foreign LLC in Louisiana?
You can dissolve a foreign LLC in Louisiana. The process is similar to dissolving a domestic LLC, but some additional steps are involved. You will need to file an affidavit of withdrawal with the Louisiana Secretary of State and publish notice of the dissolution in a local newspaper of general circulation.
How Much Does It Cost to Dissolve an LLC in Louisiana?
A filing fee to dissolve an LLC in Louisiana costs $75.
How Do I Close My Louisiana Sales Tax Account?
To close your Louisiana sales tax account, you'll need to file a final return. IRS Form 720 is used to report final tax liabilities and request your sales tax account termination. The return must be filed within 60 days of dissolving your LLC.
Can I Reinstate a Louisiana LLC?
You can reinstate a Louisiana LLC if it has been administratively dissolved. You will need to file Articles of Reinstatement with the Louisiana SOS and pay the applicable fee.
Make sure to provide legal information, such as your business name and the effective date of the reinstatement.
How to Dissolve an LLC in Louisiana
To dissolve an LLC in Louisiana, there is an established protocol to be followed. Consult the LLC's operating agreement to determine voting requirements, division of assets, and handling liabilities.
An LLC in Louisiana may be dissolved voluntarily based on the collective decision of its members. If the company fails to conform with state laws, the LLC may be terminated through Administrative or Judicial Dissolution.
A professional service provider like IncFile will guide you through the process and ensure that all necessary paperwork is filed correctly.
Working with an experienced attorney can avoid any potential problems and make the dissolution process as smooth as possible.