How to Dissolve an LLC in North Dakota? (Step by Step Guide)
All limited liability companies in North Dakota are legally required to undergo a formal dissolution process. A procedural approach is taken to properly dissolve the LLC.
To help you facilitate the process of dissolving your North Dakota LLC, I will provide a comprehensive guide backed by my experience as a seasoned business consultant.
- To dissolve an LLC in North Dakota, LLC members should follow the provisions indicated in the operating agreement.
- Follow state requirements by filing the Articles of Dissolution with the Secretary of State.
- North Dakota's business survival rates, as per the U.S. Bureau of Labor Statistics, over one, three, and five years are 79.55%, 63.63%, and 53.98%, respectively, emphasizing the importance of a strategic approach to dissolution.
- Based on my experience, the dissolution process in North Dakota is comprehensive, requiring meticulous attention to legal and financial details to ensure a smooth closure.
6 Steps to Dissolving an LLC in North Dakota
The steps to dissolve an LLC in North Dakota include consulting the operating agreement and filing the Articles of Dissolution.
Here's a detailed description of the dissolution process.
Step 1: Vote to Dissolve the LLC
Follow your North Dakota LLC operating agreement to determine the proper voting approach.
The LLC operating agreement specifies voting requirements, the division of LLC assets, and liquidation.
LLC members should hold a meeting, specifically to address the issue of dissolution.
During this meeting, members cast their votes per the stipulations outlined in the LLC's operating agreement, which typically details the required majority or unanimous consent needed for such a significant decision.
Step 2: Notify Creditors About Your LLC's Dissolution
This process begins by identifying all creditors and sending them a formal written notice of the LLC's dissolution.
"You may send a written notice to all known claimants and creditors, or alternatively, publish a notice in a newspaper within the counties where your company's registered and principal offices are located, doing so once a week for four weeks."
-Jon Morgan, Co-Founder and Chief Editor of Venture Smarter
The notice should include details such as the deadline for submitting claims, which is typically determined by state law, and instructions on how and where to submit these claims.
It's important to ensure that this notification is comprehensive and reaches all known creditors, as it legally informs them of the dissolution and their right to collect any outstanding debts, thereby helping to protect the LLC from future liabilities related to these debts.
Step 3: File Final Tax Returns and Obtain Tax Clearance
You will need to close business tax accounts associated with your business and register with the North Dakota State government.
It includes your North Dakota state tax account and your federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS). To do this, you will need to file a final tax return for your LLC.
Additionally, the overall index in the Mid-America Business Conditions Survey for North Dakota dropped to 46.1 from 50.8 in June, indicating economic shifts that businesses must navigate during dissolution .
If you have employees, obtaining a clearance certificate from the North Dakota Department of Labor, which indicates all unemployment taxes have been paid, is also necessary.
Step 4: File Articles or Certificate of Dissolution
To dissolve your North Dakota LLC, you will need to file Articles of Dissolution and Articles of Termination with the Secretary of State's office . The filing fee is $20.
You should also file the Notice of Dissolution, which costs $10.
You can file your Articles of Dissolution online, by mail, in person, or have a professional service provider do it for you.
Be sure to include the following information before submission:
- LLC name
- LLC number
- The date of dissolution
- The reason for the dissolution
- Signature of LLC members and a North Dakota registered agent
You should receive a confirmation letter from the North Dakota Secretary of State's office within a few days after they have received and processed your Articles of Dissolution.
Once you have received this confirmation letter, your North Dakota business has been officially dissolved.
Step 5: Distribute Assets
Distributing assets during the dissolution of a North Dakota LLC is a carefully managed process.
After settling all outstanding debts and obligations, the remaining assets of the LLC are allocated among the members according to the terms outlined in the LLC's operating agreement or, if not specified, in accordance with North Dakota state law.
This typically involves calculating each member's share based on their percentage of ownership or investment in the LLC.
This step's importance is highlighted by North Dakota's survival rates, with a 1-year average of 79.55%, a 3-year average of 63.63%, and a 5-year average of 53.98%, according to the U.S. Bureau of Labor Statistics, reflecting the lifecycle and dissolution phase of numerous state businesses .
The process must be conducted with transparency and fairness to ensure all members receive their rightful portion of the assets.
Step 6: Close All Accounts and Cancel Licenses and Permits
Closing all accounts and canceling licenses and permits is a final step in the dissolution of a North Dakota LLC.
This involves systematically shutting down all business-related bank accounts, credit lines, and any other financial accounts associated with the LLC, ensuring that all financial ties are neatly severed.
Additionally, the LLC must cancel any business licenses, permits, or registrations it holds, which is crucial to legally terminating its operations and preventing future liabilities.
How Much Does It Cost to Dissolve an LLC in North Dakota?
It costs $30 to dissolve an LLC in North Dakota. The fee covers $20 for the filing of the Articles of Dissolution and $10 for filing the Notice of Dissolution.
How Long Until a North Dakota LLC Name is Available Again?
A North Dakota LLC name becomes immediately available for other entities to use right after the dissolution has been finalized.
How Long Does It Take to Dissolve an LLC in North Dakota?
It takes up to 30 days to dissolve an LLC in North Dakota. Unfortunately, the Secretary of State does not offer expedited services.