How to Dissolve an LLC in Nebraska? (Step by Step Guide)
The state of Nebraska requires all business entities to go through a formal dissolution process. Certain steps must be taken to ensure that the dissolution is properly executed.
After partnering with our panel of seasoned business consultants and consulting a team of lawyers in Nebraska, I developed this in-depth guide on properly dissolving an LLC in the state.
Quick Summary
- To properly dissolve an LLC in Nebraska, consult your operating agreement and follow state requirements.
- Under state laws, LLCs should inform banks, creditors, and other interested parties of the company's dissolution through local papers.
- In 2023, as per the U.S. Small Business Administration, Nebraska experienced 5,485 small business closures, indicating significant market challenges.
- Based on my experience, careful compliance with Nebraska's dissolution steps is crucial to avoid unintended consequences and ensure a smooth transition.
6 Steps to Dissolving an LLC in Nebraska
Dissolving your Nebraska business entails a procedural approach.
Step 1: Vote to Dissolve the LLC
The first step in dissolving an LLC in Nebraska is to hold a formal vote among the LLC members. This decision-making process is typically governed by the LLC's operating agreement, which outlines the required majority for such significant decisions.
During our experience, we documented the outcome of this vote in a written resolution, which served as an official record of the members' intent to dissolve the LLC.
This step is not only a legal requirement but also sets the tone for the dissolution process, ensuring that all members are on the same page and agree to move forward with the dissolution.
In 2023, as per the U.S. Chamber of Commerce, Nebraska witnessed the initiation of 21,574 new business entities, reflecting the state's growing entrepreneurial activity [1].
However, the same year, according to the U.S. Small Business Administration, also saw the Nebraska small business sector experience 5,485 closures, underscoring the challenges within the local business environment [2].
Step 2: Notify Creditors About Your LLC's Dissolution
It is important to notify creditors and settle obligations, including all transferable interests to the proper entities. Otherwise, you may find yourself personally liable for the debts of your Nebraska LLC.
Under Nebraska state laws, LLCs are required to publish a notice of dissolution in local newspapers to notify interested parties [2].
Step 3: File Final Tax Returns and Obtain Tax Clearance
Close all tax accounts—income and federal employment accounts—by filing a final tax return with the Nebraska Department of Revenue and Internal Revenue Service (IRS)
When filing our returns, we included a notice that we were dissolving our limited liability company and that this was our final return.
We also got a tax clearance certificate from the Nebraska Department of Revenue.
This certificate is proof that your LLC has no outstanding taxes.
Step 4: File Articles or Certificate of Dissolution
Once you have decided to dissolve a Nebraska LLC, file the Nebraska LLC articles of dissolution with the Nebraska Secretary of State.
You can do this by filing a Certificate of Cancellation with the state or by employing a professional service provider to finish the task on your behalf. Don't forget to include a filing fee of $15.
The articles of dissolution are a simple form that you will need to fill out and submit to the state.
The form must be signed by a majority of the LLC members and must include the following information:
- The name of your LLC
- The date of dissolution
- The reason for the dissolution
- The signature of an authorized person
Step 5: Distribute Assets
After settling all debts and obligations, the LLC must distribute its remaining assets among the members.
This distribution should be carried out according to the terms outlined in the LLC's operating agreement or, if not specified, in accordance with Nebraska's LLC laws.
In our case, assets were distributed based on the members' ownership percentages.
This step is vital as it ensures that all members receive their fair share of the LLC's remaining value, marking a key part of the winding-up process.
Step 6: Close All Accounts and Cancel Licenses and Permits
The final step in dissolving an LLC in Nebraska is to close all business-related accounts and cancel any licenses or permits.
This includes shutting down bank accounts, credit lines, and any other financial accounts associated with the LLC.
Additionally, any business licenses or permits that were obtained for operating the LLC must be formally canceled.
"Should your LLC neglect Nebraska's dissolution protocols, it remains active, risking its status and name despite the absence of biennial report submissions and associated fees."
-Jon Morgan, Co-Founder & Chief Editor of Venture Smarter
This step is crucial to preventing future liabilities and ensuring that the LLC is completely wound up in a legal and orderly manner, leaving no loose ends.
FAQs
What Happens When a Nebraska LLC Is Dissolved?
When a Nebraska LLC is dissolved, it ceases to exist. This means that the business will no longer own any assets or liabilities and will not be required to file any tax returns.
The dissolution of a business also cancels any licenses or permits that have been issued to the business.
How Long Does It Take to Dissolve an LLC in Nebraska?
It takes 2-3 business days to dissolve an LLC in Nebraska. This is the average time the Secretary of State takes to process the Articles of Dissolution.
How Much Does It Cost to Dissolve an LLC in Nebraska?
It costs $5 to dissolve an LLC in Nebraska. The filing fee covers the processing of the dissolution documents.
References:
- https://www.uschamber.com/small-business/new-business-applications-a-state-by-state-view
- https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-NE.pdf
- https://nebraskalegislature.gov/laws/statutes.php?statute=21-193
