Whatever reason you have as a business owner for dissolving your LLC, the process is the same. So, if you want to dissolve your LLC but don't know where to begin, you're in luck because this article will discuss how to dissolve a Massachusetts limited liability company. This can be helpful for both foreign LLC and domestic Massachusetts LLC owners that want to dissolve their business.
There are a few required steps that you will need to take to complete the administrative dissolution process. We will walk you through each of them and provide some helpful tips along the way!
Step 1: Follow Your Massachusetts LLC Operating Agreement
Before taking any action to dissolve your LLC, it's important to review your Massachusetts LLC operating agreement first. This document should lay out the process for dissolution, as well as any other important information about winding down the business. If you don't have an operating agreement, you will need to follow the state's default rules.
Typically, rules require filing written consent with the Massachusetts Secretary of State's office. This consent must be signed by LLC members. Once you have filed the written consent, you will need to wait for a period of 60 days.
A majority of LLC Members must approve the Massachusetts LLC dissolution plan as per the operating agreement. If there are no objections during the 60 days, you can proceed with dissolving your Massachusetts LLC.
Step 2: Close All Tax Accounts
The following step in dissolving your Massachusetts limited liability company is to close all tax accounts with the IRS. This includes filing a final tax return. You will also need to obtain a tax clearance certificate from the Massachusetts Department of Revenue.
This certificate indicates that your LLC has no outstanding taxes owed to the state. Once you have obtained this certificate, you can move on to the next step in the dissolution process.
Step 3: File a Certificate of Cancellation
The next step to dissolve a Massachusetts LLC is to file Massachusetts LLC Articles of Dissolution, known in Massachusetts as Certificate of Cancellation, to the Massachusetts Secretary of the Commonwealth, Corporations Division. You will need to include the following information:
- Business name
- Date of dissolution
- Reason for dissolution.
Your LLC members will also need to sign this document and have it notarized. The Secretary of the Commonwealth can usually process your paperwork in 3-5 business days.
A filing fee of $100 must be paid when you submit your Certificate of Cancellation. This filing fee can be paid by check or money order made payable to the Commonwealth of Massachusetts.
If you are a federal employer, you will also need to file annual reports with the corporation's division of the Massachusetts Secretary of State's office. These reports are due every year on your LLC's formation anniversary. You will need to file a final report to avoid the administrative dissolution of your Massachusetts LLC.
After Dissolving Your Massachusetts LLC
After you officially dissolve a Massachusetts LLC, your business name will not be reserved anymore. Any other business will be eligible to use your Massachusetts LLC name immediately after 120 days of dissolving your LLC.
Keep in mind that dissolving your LLC does not mean that your business entity ceases to exist.
You will still need to take care of any outstanding obligations, such as paying taxes or resolving any debts. Once you have taken care of these items, you can then close your Massachusetts business for good.
Do I Need to Close My EIN Number?
Yes, you will need to close your federal employer identification number (EIN) with the IRS. This can be done by filing a final tax return. You will also need to obtain a tax clearance certificate from the Massachusetts Department of Revenue.
What Is the Difference Between Dissolving and Liquidating a Company?
Dissolving a company means that it will no longer exist, and all of its LLC assets will be distributed to its owners. Liquidating a company means that the company will sell all of its assets and then dissolve.
Dissolving an LLC in Massachusetts: Conclusion
Dissolving your limited liability company in Massachusetts is a relatively simple process. However, there are a few steps that you need to take to ensure that everything is done correctly. Once you have taken care of those steps, you can then move on to closing your business for good. If you have any questions, be sure to consult with a professional service provider. Thanks for reading!