How to Dissolve an LLC in New York? | Step-By-Step Guide

Delina Chantel Yasmeh
Published by Delina Chantel Yasmeh | Author
Last updated: February 20, 2024
FACT CHECKED by Lou Viveros, Growth & Transition Advisor
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LLC owners may decide to dissolve their New York LLC due to the completion of the venture, termination of a project, and personal decisions. Whichever the case, dissolving an entity is accomplished by taking a procedural approach.

After consulting with my fellow LLC specialists in New York, I gained considerable knowledge regarding the dissolution process in the state.

I also spent my time researching the legal aspects of the procedure to help your New York LLC stay compliant with state laws.

Quick Summary

  • To dissolve an LLC, follow the operating agreement, notify relevant parties, settle debts and obligations, and file the Articles of Dissolution with the New York Department of State.
  • Members can opt for voluntary dissolution by voting according to the operating agreement and signing a written consent form.
  • With small businesses in New York City experiencing a net decrease of 444,048 jobs, according to the New York State Department of Labor, reflecting the challenging economic environment, it becomes even more crucial for careful financial planning and asset distribution during LLC dissolution.
  • In my opinion, the comprehensive steps outlined ensure a smooth dissolution process, protecting members' interests and adhering to New York's legal requirements.


6 Steps to Dissolving an LLC in New York

The procedure for voluntary dissolution of a New York Limited Liability Company is accomplished by following the provisions indicated in the operating agreement and state requirements.

Step 1: Vote to Dissolve the LLC

Writing a signature on terms and conditions

For a New York limited liability company to voluntarily dissolve, members should convene and follow the rules of dissolution stated in the operating agreement.

This document outlines the voting process and requirements during the dissolution.

If the majority of members vote and agree with the dissolution, they should sign a written consent form stating so and begin the process.

Step 2: Notify Creditors About Your LLC's Dissolution

When dissolving an LLC in New York, it's essential to notify all creditors about the dissolution to settle any outstanding debts or claims. This notification should be done in writing.

After notifying creditors, the LLC must wait for the claim period to expire before distributing any remaining assets among members, ensuring all valid claims are addressed first.

In light of New York City's private sector jobs rising by 54,900 to 4,181,500 in December 2023, as per the New York State Department of Labor, the economic dynamics underscore the importance of timely addressing financial obligations during the dissolution process [1].

Step 3: File Final Tax Returns and Obtain Tax Clearance

Magnifying glass zooming on tax

LLC members should pay minimum business taxes, file the final business tax returns, and close all business tax accounts to get written consent for dissolution.

If the LLC has incurred tax liability in New York City, obtaining written consent to dissolve from the New York City Commissioner of Finance is necessary as well.

While it is true that no New York Department of State requires you to have your tax clearance before dissolving your LLC, the New York Department of Taxation and Finance strongly recommends you file:

  • Final business tax returns
  • Final form NYS-45, if you have employees
  • Final sales tax return, if you sell goods

On your IRS Form 1065, check the "final return" box when you submit your federal tax return.

"Regardless of business activity, employment of capital, property ownership or leasing, office maintenance, receipt derivation, or engagement in any activities within or outside New York State, an existing domestic corporation must continue to file state returns and settle any taxes or fees due until officially dissolved."

-Jon Morgan, Co-Founder & Chief Editor of Venture Smarter

Step 4: File Articles or Certificate of Dissolution

File the Articles of Dissolution with the New York Department of State. The document contains the following [2]:

  • Dissolution form
  • Business name
  • Date of organization
  • Written consent form
  • Reasons for dissolution

Articles of Dissolution should be sent to this mailing address:

NY State Department of State Division of Corporations, State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231-0001

Once all of these steps are completed, the business is considered dissolved.

You can find the forms, filing fees, and mailing addresses on the official websites of the New York Department of State.

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Step 5: Distribute Assets

Registration checklist

The distribution process begins with an accurate assessment and valuation of the LLC's assets, ensuring a fair and equitable distribution among the members.

With small businesses experiencing a net decrease of 444,048 jobs, reflecting both gains of 484,391 jobs and losses of 928,439, the strategic distribution of assets becomes even more crucial for ensuring members are adequately compensated during challenging economic times [3].

If the operating agreement does not specify a method for asset distribution, the assets are divided according to each member's ownership percentage in the LLC.

Before distribution, it's crucial to ensure that all tax obligations are fulfilled, as failure to do so can lead to legal and financial complications for the members.

Step 6: Close All Accounts and Cancel Licenses and Permits

As part of the LLC dissolution process in New York, closing all business accounts is crucial to prevent future liabilities and to formally conclude business operations.

This involves closing bank accounts, credit lines, and any other financial accounts associated with the LLC to ensure no further transactions occur post-dissolution.

Additionally, the LLC must cancel any licenses or permits it holds, which may require notifying the issuing authorities and completing specific cancellation procedures as per state and local regulations.

FAQs

How Long Does It Take to Dissolve an LLC in New York?

It takes about 120 days to dissolve an LLC in New York. However, expedited processing only takes at least a month.

How Much Does It Cost to Close an LLC in New York?

It costs $60 to dissolve an LLC in New York and an additional $25 for expedited processing.

How Long Before Someone Can Take Your New York LLC Name?

Someone can take your New York LLC name after the dissolution process is officially finished.

References:

  1. https://dol.ny.gov/labor-statistics-new-york-city-region
  2. https://dos.ny.gov/system/files/documents/2023/08/1366-f.pdf
  3. https://dol.ny.gov/labor-statistics-new-york-city-region

About The Author

Author
Delina Chantel Yasmeh, J.D./Tax LL.M, specializes in Mergers and Acquisitions at Deloitte and PwC, managing billion-dollar transactions. Educated in Accountancy at California State University and holding advanced degrees from Loyola Law School, she is highly skilled in tax law. Delina also dedicates time to pro bono work for women and children.
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Growth & Transition Advisor
LJ Viveros has 40 years of experience in founding and scaling businesses, including a significant sale to Logitech. He has led Market Solutions LLC since 1999, focusing on strategic transitions for global brands. A graduate of Saint Mary’s College in Communications, LJ is also a distinguished Matsushita Executive alumnus.
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