When a business is no longer viable, or when the business owner wants to move on to other ventures, it may be necessary to dissolve the limited liability company. Dissolving an LLC is a relatively simple process in Rhode Island.
However, with the help of an attorney, it can be done quickly and efficiently. In this blog post, we will discuss the steps necessary to dissolve an LLC in Rhode Island.
Step 1: Follow Your Rhode Island LLC Operating Agreement
The first step in dissolving your Rhode Island LLC is to follow the provisions laid out in your LLC's operating agreement. This document will likely outline the dissolution process, as well as dissolution vote or other procedural matters.
If you do not have an operating agreement, you can dissolve your LLC by following the default rules set forth in Rhode Island.
Step 2: Close All Tax Accounts
The next step in Rhode Island LLC dissolution is to close all various tax accounts and pay any outstanding tax obligations.
This includes filing a final return with the Internal Revenue Service and the Rhode Island Department of Revenue. You should also file a tax clearance form with the Department of Revenue to ensure that all tax liabilities have been paid.
After you file a Tax Clearance certificate, All LLCs in Rhode Island are also required to file an annual report and pay a franchise tax. When dissolving your LLC, you must still file these forms and pay any outstanding taxes.
Step 3: File Articles of Dissolution
Once you have followed the provisions of your operating agreement, the following step in Rhode Island dissolution is to file Rhode Island LLC Articles of Dissolution with the Rhode Island Secretary of State. This document is available on the Secretary of State's website.
The filing fee is $50. You can file it online, in person, or you can send it by mail to:
Division of Business Services
148 W. River Street
Providence, Rhode Island 02904-2615
These articles must be signed by LLC members and must include the business name, the effective date of dissolution, the reason for dissolution, and the name and address of the LLC's registered agent. According to the Rhode Island Secretary of State, it takes about 7-10 business days to officially dissolve a Rhode Island LLC.
How to Dissolve a Foreign LLC in Rhode Island?
The process for dissolving foreign LLCs in Rhode Island is similar to the process for dissolving domestic Rhode Island LLCs.
You will need to follow the provisions of your operating agreement, close all tax accounts, file Articles of Dissolution with the Secretary of State, and notify creditors of the dissolution.
The only difference is that you will also need to file a certificate of withdrawal with the Secretary of State.
This document is available on the Secretary of State's website.
After Dissolving Your LLC
After you dissolve a Rhode Island, you will need to notify creditors of the dissolution and provide them with a way to contact the business. You should also close any business bank account and transfer any LLC assets to the rightful owners.
Finally, you should remove all references to your business from your website and social media accounts.
What Are the Reasons to Dissolve an LLC?
The most common reasons to dissolve a Rhode Island LLC are financial difficulties, the death of a business owner, or the retirement of a business owner.
What Are the Consequences of Not Dissolving an LLC?
If you do not dissolve your LLC, you may be liable for any debts or obligations of the company. Additionally, the state may eventually dissolve the company on its own accord, which could result in penalties.
Dissolving an LLC in Rhode Island: Conclusion
Rhode Island LLC dissolution is a relatively simple process. However, it is important to follow the proper steps to ensure that the dissolution is done correctly.
If you have any questions about dissolving your Rhode island business, you should contact a business attorney for assistance.