In Missouri, LLCs can be dissolved for many reasons. Some LLCs are dissolved due to legal issues that make it difficult or impossible to conduct business in the state.
Other Missouri businesses dissolve their LLC when they want to change the type of business entity they operate under - like from an S-Corp to a C-Corp.
But no matter why you're considering dissolving your Missouri LLC, there are steps that must take place before you can do so.
The process is seemingly straightforward and simple, but there are a lot of go-betweens and potential roadblocks.
The most important thing to remember is that all of the steps must be completed in order, or you'll have to start from scratch. Not sorting these legal matters right from the start can lead to costly mistakes, so take your time.
Reasons to Dissolve a Missouri LLC
A limited liability company in Missouri may be dissolved for several reasons, including:
- The company is no longer doing business in Missouri.
- The company's assets have been liquidated, and the liabilities have been paid off.
- The members of the LLC agree to dissolve the company.
- The company fails to file an annual report with the state.
- A court orders the company to be dissolved.
- The owners want to dissolve the business due to several other reasons not listed here.
The biggest difference lies in the fact that some of the reasons to dissolve a Missouri LLC might come from the owners themselves (voluntary dissolution) or the business gets shut down by state authorities (administrative dissolution).
Voluntary Dissolution of a Missouri LLC
The dissolution process for LLC owners who want to voluntarily dissolve an LLC is governed by the LLC's operating agreement and the Missouri Limited Liability Company Act.
The operating agreement will likely contain specific provisions regarding how and when the LLC may be dissolved. If the LLC does not have an operating agreement or is silent on dissolution, then specific sections of the Missouri Limited Liability Company Act will apply.
LLC's dissolution has to handle the LLC assets and liabilities of the company, which must be distributed in accordance with the operating agreement (if there is one).
On this occasion, LLC members or managers need to decide how assets and liabilities will be distributed.
LLC's dissolution has a lot of steps that should be followed carefully in order to make sure everything is done correctly.
Although the majority of Missouri LLCs will have an operating agreement that contains dissolution provisions, Missouri's LLC Act allows an alternative method to dissolve an LLC voluntarily.
If you can obtain the written consent of all the members, you can still dissolve the LLC without taking any further steps.
Involuntary Dissolution of a Missouri LLC
When a business in Missouri fails to remain in good standing with the state, the Secretary of State's office may administratively dissolve the company.
This means that the LLC is no longer recognized as a legal entity in Missouri, and its assets are liquidated to pay business debts. There are several reasons why a business may lose good standing with the state, including but not limited to:
- Failing to file annual reports
- Failing to pay taxes or fees
- Having a judgment entered against it
- Being involved in illegal activities.
If your Missouri LLC is involuntarily dissolved, you will need to take action to reinstate and it can be complex and may require the help of an attorney.
Missouri LLC Dissolution Process
Before your Missouri LLC is officially dissolved, there are several steps you have to take. Unless completed, they can lead to further complications with the paperwork or even legal action.
All of the following steps are equally important, so it's essential that you do everything by the books.
Wind up the LLC
Provided that all of the LLCs have agreed to dissolve the LLC, you will have to send a notice of winding up to the Missouri Secretary of State.
A $25 filing fee follows this notice of winding, and it has to contain the LLC name, registered office, name and address of any known agent for service of process, the name, title, or position held by each manager or person dissolving the company, date when dissolution will take place, and signature/signatures from all authorized managers agreeing to dissolve your LLC.
The winding-up process also consists of other equally important steps that are governed by Missouri law.
This process should be handled with great care and desirably by someone directly involved with the company, such as a member or a manager.
The auditing process also includes collecting all LLC assets that must be paid or making provisions for the payment of all LLC liabilities.
Furthermore, any property not to be distributed to LLC members is disposed of, and LLC assets are applied to creditors and members.
According to the LLC Act of Missouri, reimbursing creditors is a priority, including LLC members who are creditors.
It is critical that you pay all outstanding taxes as soon as possible.
Unless your operating agreement specifies differently, current and past LLC members should be paid out based on a member's withdrawal from the company or a prior agreement of members to make a payment.
Finally, if any assets remain, you should make distributions to members in proportion to their contributions and then in equal shares (unless your operating agreement and the Articles of Organization provide differently).
Send Notice to Creditors
An LLC in Missouri is required to provide a written notice to all known outstanding creditors, claimants, or other persons who have an interest in the LLC's property that is subject to distribution.
The published business certificate of dissolution is not required to be sent. However, sending a business certificate of dissolution may help limit the LLC's liability and ease final distribution decisions.
Creditors have four to five months from the date they receive notice or knowledge that an LLC has been dissolved to file any claims against the business' assets.
This period can be extended for up to six months if the creditor can show that it was not reasonably possible to file a claim sooner.
Creditors or claimants who will be potentially filing a claim against the business should receive written notice from their business.
This is done by sending them a letter that includes:
- A description of the information they must include in their claim, along with an explanation if necessary
- The mailing address where a claim should be sent and the deadline by which the dissolved business must receive the claim
- That their claim will be barred if not received by the deadline.
The notice to creditors should also state that any distribution of assets will be made in accordance with the provisions of Missouri law, and, as a result, some claimants may not receive payment in full for their claims.
File Articles of Termination
Missouri law requires you to file Articles of Termination (Notice Of Abandonment Of Merger Or Consolidation of LLC) with the Secretary of State once all of your LLC's remaining property and assets have been properly utilized and dispersed.
You can file the Articles either online or by mail. The notice of winding up contains information identical to the Articles of Termination.
The information you need to include in the Articles of Termination is:
- The business name of your LLC
- The date the Articles of Termination are filed
- A statement that the LLC is being dissolved and will terminate on a certain date
- The signature of an authorized individual
Once you have filed the Articles, be sure to send a copy to each of your LLC's creditors. Don't forget to notify your employees of the dissolution and termination of the LLC.
FAQs
Do I Need to Get Tax Clearance in Missouri?
No. If you are the sole owner of your LLC and there is no other business activity, filing for a "dissolution" automatically cancels any tax filings.
The Missouri Department of Revenue will be notified of the dissolution and will update its records.
How Do I Dissolve a Foreign LLC in Missouri?
Unlike a domestic Missouri LLC, foreign LLCs need to file the Articles of Cancelation of a Foreign Limited Liability Company with the Missouri Secretary of State.
The form can be found on their website. The filing fee for this service is $25.
How Much Does It Cost to Dissolve an LLC in Missouri?
The filing fee for the Articles of Termination is $25. However, depending on the paperwork and the other legal documents specific to your LLC, the cost might be higher, even more so if you hire a professional service to help you with different forms and filings required for the dissolution.
How Long Does It Take To Dissolve an LLC in Missouri?
In Missouri, the dissolution of an LLC will take approximately four days to get processed. The exact timeframe may vary depending on the county where the documents are filed.
You can expedite this process by using our online document preparation service. Once your documents have been processed, you will receive a stamped and certified copy of your Articles of Dissolution.
What Is a Judicial Dissolution of an LLC in Missouri?
Judicial dissolution of an LLC in Missouri is a legal process through which the court dissolves an LLC.
The grounds for judicial dissolution might differ in other states but typically include situations that breach the operating agreement, the Articles of Organization, or when the LLC is not functioning properly.
How Do I Reactivate My LLC in Missouri?
If your LLC has been administratively dissolved, you may request reinstatement by submitting an email to the Secretary of State to obtain the required forms and information.
However, if your organization was voluntarily dissolved, you must petition the court to have it reinstated.
The filing fee for reinstatement is $55, but if your Missouri LLC has been dissolved for a long period of time, you may be required to pay additional charges.
If you want to reactivate a Missouri LLC after ten years, there would be a $50 reinstatement fee as well as additional fees depending on how far into the next decade you are.
Can Someone Take My Missouri LLC Name After Dissolution?
Your former business name will be available as soon as you file all the forms with the state authorities and the creditors and other third parties receive notice of the dissolution.
The company cannot sell or lease the trade name to another business entity without the LLC's members and managers' written consent.
What Happens if I Fail to Formally Dissolve My LLC in Missouri?
If you fail to formally dissolve your Missouri business, the LLC continues to exist and you're still required to file annual reports with the Missouri Secretary of State. This could lead to late fees and penalties, as well as potential liability issues.
Conclusion
Dissolving an LLC in Missouri can be complicated because there is a lot of paperwork and legal matters involved.
When deciding to dissolve your business, you should first contact IncFile or another company that specializes in this area. You want someone who has experience with these issues and knows all about the process for dissolving an LLC.
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