When you start a business, one of the first decisions you have to make is what type of legal entity to form. A limited liability company (LLC) can be a great option, but what happens if you decide that it's no longer right for your business? This article will show you how to dissolve an LLC in West Virginia.
West Virginia LLC dissolution doesn't have to be a headache. You can do it yourself with the right information and guidance. Without it, dissolving your West Virginia LLC can be costly and time-consuming. An LLC dissolution can become expensive, especially if you do not have all the correct documentation or if you are missing critical deadlines.
The dissolution process of your LLC in West Virginia involves 3 broad procedural steps, such as following your operating agreement, closing tax accounts and business permits, and then filing your articles of dissolution to the West Virginia Secretary of State. You can find more detailed information on each step below.
Step 1: Follow Your West Virginia LLC Operating Agreement
First, you need to check your LLC operating agreement. It's a comprehensive guide you acquired when you started a Limited Liability Company as a business organization. It covers the fundamental functions of an organization, including how to construct and manage the continued operation, as well as the process of dissolving it.
West Virginia LLC, like most LLCs, follows the standard dissolution process, which begins with a meeting among LLC members.
The majority of members must agree to dissolve your Limited Liability Company in order to go into legal proceedings. The dissolution votes must be noted and recorded in the LLC's meeting minutes.
Once everyone has cast their votes, you may proceed to the following steps:
- Determine the formal date of dissolution
- Distributing remaining LLC assets among the stakeholders and members
- Notify creditors and settle any business debts
One thing to keep in mind is that this is a general procedure. To avoid difficulties, your organization should seek professional assistance. If your LLC's operating agreement does not include any dissolution processes, you can contact the West Virginia Secretary of State for more information.
Step 2: Close All Business and Tax Accounts
Various tax accounts acquired throughout your LLC's legal existence are maintained by the State government with the help of various departments. However, West Virginia LLCs are not required to acquire a tax clearance certificate before dissolving.
While this is true, it is nevertheless critical to ensure that there isn't anything still owed on behalf of the West Virginia Limited Liability Company before the effective date of dissolution. Doing so prevents any tax obligations from being unfulfilled and risks fines or other financial penalties.
Common taxes in West Virginia LLC:
- Sales & Use Tax Accounts
- Employee Withholding Tax Accounts
- Unemployment Insurance Tax Accounts
- State Income Tax Accounts
- Local Tax Accounts
Closing these tax accounts is typically done by completing a final tax return with the concerned tax agency, although some accounts may require additional file paperwork.
Other taxes to consider:
- Federal Taxes
- Personal Income Taxes
- Franchise Taxes
Business Account Clearance
Dissolving a West Virginia LLC also entails closing all bank accounts, canceling official business contracts, collecting final payments, withdrawing leases, and perhaps terminating any business licenses in the state ascribed to your company. This will safeguard both your reputation as a business entity and your finances.
Step 3: File West Virginia LLC Articles of Dissolution
Once initial procedures are done, you can already file the West Virginia Articles of Dissolution with the West Virginia Secretary of State. The application form is available for request at the Secretary of State Website of West Virginia state website.
For dissolving a domestic West Virginia LLC, you have to look for the Domestic LLC Articles of Dissolution page. In contrast, a foreign LLC should look for the Foreign LLC Dissolution process. Then, you have to download the pdf form of the article of dissolution you are looking for and fill in all the important and legal information in the form.
Once done, choose the mode of payment you want to use to pay the West Virginia LLC dissolution filing fee of $25. You can send the form by mail, fax, email, online, or in person, whatever is most convenient for you, to the correct mailing address
Your West Virginia LLC will cease to exist after this form has been submitted and processed.
Reasons for West Virginia LLC Dissolution
There are many reasons people would want to dissolve their West Virginia Limited Liability Companies. A business owner may have decided to sell the firm, retire, or just close it down for personal and/or professional reasons.
Some of the most common voluntary reasons for the dissolution of West Virgina LLC:
- If the company's owners lack marketing competence, they must dissolve.
- If manufacturing expenses are growing and there is no profit to cover the charges.
- Excessive business debt levels on the balance sheet.
- The owners cannot keep up with the resource spending.
- Inability to meet the demands of the company's most important and critical clients.
As soon as a West Virginia LLC is formed with the West Virginia Secretary of State, the LLC is accountable for recurrent responsibilities of the West Virginia Secretary of State and the West Virginia Department of Revenue. If the West Virginia LLC fails to make reports or pay taxes, it may be subject to penalties that increase over time.
However, there are involuntary reasons to have your West Virginia LLC be subjected to dissolution, like failing to file your annual report within 60 days following your due date. This includes any taxes, fees, or other forms required by the state. In this situation, the state protects your business name for two years, and you will need to apply for reinstatement with the Secretary of State.
What Is the Cost to Dissolve an LLC in West Virginia?
If you're considering dissolving a domestic West Virginia LLC, you're probably curious about the dissolution process and what it will require of you. Whether you're filling out and filing the necessary forms yourself or with a professional service provider, dissolving your West Virginia LLC is not difficult. Read on to get an overview of the LLC dissolution procedure.
To begin, you must complete the Articles of Dissolution, which include crucial information about your company, such as the formal name of your LLC and a return address in case of any concerns arise. It also requires the owner to fill out their legal name, title, and original signature. The documentation for West Virginia LLC dissolution is generally simple unless the quantity of ownership increases, in which case it becomes complex.
The West Virginia Secretary of State usually processes online submissions in 2-3 days while hardcopy filings in 5-10 business days. If you want expedited processing, you can pay for one of many expediting options. The cost of 24-hour service is $25, two-hour service is $250, and one-hour service is $500.
After dissolving your Limited Liability Company in West Virginia, it is important to notify the Secretary of State that you no longer need any business entities and permits or bank accounts to safeguard both your reputation as a business entity and your finances.
You may also dissolve your LLC yourself or hire a registered agent to do it for you. Before joining up for any service, make sure to examine the costs. Some services require a one-time price, while others require an annual fee. These professional service fees can be worth the expense if you don't want to deal with the paperwork and want a smooth dissolution procedure.
Related Article: How to Start an LLC in West Virginia?
How Much Does It Cost to Dissolve a West Virginia LLC?
There is a filing fee of $25 to be paid for the Articles of Dissolution due to the West Virginia Secretary of State.
How Long Before Others Can Use Your Business Name?
Your business name is immediately available for others to use once the voluntary termination of your West Virginia LLC formally dissolves. However, for West Virginia LLCs that have been subjected to administrative dissolution by the West Virginia Secretary of State, only after a two-year period of reinstatement will the business name be available for use.
Do You Need a Tax Clearance Before Dissolving a West Virginia LLC?
Yes, you need tax clearances, but you do not have to request the clearances yourself upon filing the Articles of Dissolution. The West Virginia SOS will be the one to contact the West Virginia Tax Department, Employer Coverage Unit, and Department of Employment Security.
The West Virginia Secretary of State will not release your certificate of dissolution unless it has obtained such clearances in writing.
How Do I Remove a Member From a West Virginia LLC?
You can't simply change or remove a member from an LLC in West Virginia. It would require you to file some paperwork, like an Application to Appoint or Change Process, Officers, and/or Addresses.
Dissolving a West Virginia LLC: Conclusion
Like other LLCs, dissolving your West Virginia LLC is not that complex. We hope the steps provided in this article on how to dissolve an LLC in West Virginia help you understand the process, but it is always advisable to get expert advice during such a significant shift.
Other considerations may also need to be examined in order to dissolve your West Virginia LLC effectively. An attorney can assist you in navigating the procedure and ensuring that all essential steps are performed.