How to Dissolve an LLC in Minnesota? (Simple Guide)
A Minnesota LLC may dissolve because of the completion of the business, termination of the project, personal decisions, and loss of profit.
Having been in the limited liability consultancy business for over a decade, I conducted the necessary research to provide you with a comprehensive guide on how to effectively dissolve your Minnesota LLC.
Quick Summary
- To dissolve an LLC in Minnesota, you have to hold a meeting and file a notice of dissolution, as well as the Articles of Termination.
- An LLC dissolution process must conform to the conditions of the Minnesota LLC Act.
- The dissolution of an LLC in Minnesota becomes a more relevant topic when faced with the state's business failure rates—22.7% in the first year, escalating to 59.6% within the first decade, as reported by LendingTree
- From my perspective, the dissolution of an LLC, while often overlooked, is an essential aspect of business lifecycle management.
6 Steps to dissolving an LLC in Minnesota
When dissolving an LLC, make sure you understand what needs to be done beforehand. Here are the steps you should follow.
Step 1: Vote to Dissolve the LLC
The first step in dissolving an LLC is to gather all the members of the company and have a meeting.
The purpose of this meeting is to vote on whether or not to dissolve the company. If more than half of the voting members agree to dissolve the entity, then the official process can move forward.
Step 2: Notify Creditors About Your LLC's Dissolution
We compiled a list of all creditors to whom our LLC owes money and drafted a formal notice of dissolution.
This notice should include the LLC's name, the decision to dissolve, the effective date of dissolution, and instructions for creditors to submit their claims.
Minnesota state law often dictates a timeframe between 30-90 days within which creditors must submit their claims after receiving notice.
Once claims were received, our LLC owners reviewed them for validity.
"The LLC should settle legitimate claims per available assets. If the LLC doesn’t have enough assets to pay all claims, state laws usually provide a priority order for payment."
-Jon Morgan, Co-Editor & Co-Founder of Venture Smarter
Step 4: File Articles or Certificate of Dissolution
File a notice of dissolution with the Minnesota Secretary of State once the members of your Minnesota LLC have voted and finalized the motion to dissolve the company.
Make sure to include the following information in your notice:
- The business name
- The effective date of the dissolution
- A statement that your LLC is dissolving voluntarily
- The signature of an authorized person (a registered agent)
Once our notice was completed and approved, we submitted the Articles of Termination to the Minnesota Secretary of State.
The dissolution articles can be filed either online, in person, or by mail. In our case, we filed it online.
You can download the forms from the SOS website or hire professional services to do this for you [1].
They are shipped to Business Services Retirement Systems of Minnesota Building, 60 Empire Drive, Suite 100, St Paul, MN 55103.
The filing fee for mail or in-person submissions to the Business Services Retirement Systems is \$35. There is an additional fee of \$55 if you want to use their expedited service. The exact cost applies to online filing.
Step 5: Distribute Assets
Liquidate the company's remaining assets equitable among the members and settle all liabilities, including all transferable interests to the proper entities.
The transfer of our transferable interests was all done by the terms of the Minnesota LLC articles and bylaws.
Dissociated members can also be required to provide written notice of their intent to dissolve, transfer, or withdraw from the LLC in Minnesota before completing a dissolution process.
Step 6: .Close All Accounts and Cancel Licenses and Permits
The last step is to close any business bank accounts associated with the LLC, a significant step towards finalizing the dissolution process, especially because, according to the US Small Business Administration, Minnesota saw 14,523 business establishments close between March 2021 and March 2022, highlighting the importance of orderly closure procedures [2].
Before closing our accounts, we ensured all outstanding checks had cleared and all automatic payments had been redirected or canceled.
The LLC should cancel any business licenses, permits, or registrations it holds. This includes state and local business licenses, sales tax permits, professional licenses, and any other permits specific to the LLC's industry or location.
Depending on the nature of the business, the LLC may need to notify certain government agencies, industry regulators, or licensing boards about its dissolution. This is particularly important for businesses in regulated industries.
FAQs
Can You Renew a Dissolved LLC in Minnesota?
Yes, you can only renew a dissolved LLC in Minnesota by settling the requirements needed to reinstate the business entity. File an annual report, pay the annual franchise tax, or reinstate a registered agent.
How Long Does It Take To Dissolve an LLC in Minnesota?
It takes one week to dissolve an LLC in Minnesota. The length of time it takes to complete your paperwork varies based on the type of filing.
How Much Does It Cost to Dissolve an LLC in Minnesota?
It costs \$35 to dissolve an LLC in Minnesota, but you will need to spend additional \$55 for expedited services.
References:
- https://www.sos.state.mn.us/media/1384/dcdissolutionsharesissued.pdf
- https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-MN.pdf
