If you are an LLC business owner, there may come a time when you decide to dissolve your Wisconsin limited liability company.
As a business advisor and legal consultant with over a decade of practice, I conducted in-depth research backed with legal information and personal experience to provide you with a comprehensive guide on how you could legally dissolve your Wisconsin LLC.
Quick Summary:
- To dissolve an LLC in Wisconsin, consult your LLC's operating agreement and comply with statutory requirements.
- File the Articles of Dissolution with the Wisconsin Department of Financial Institutions.
- A Wisconsin LLC can be terminated through voluntary, administrative, or judicial reasons.
Steps to Dissolving a Wisconsin LLC
The steps to dissolving a Wisconsin limited liability company include a formal dissolution process to legally terminate the business.
The procedure to dissolve an LLC in Wisconsin are as follows.
Step 1: Follow Your LLC Operating Agreement
The procedure required to dissolve an LLC should be outlined in the operating agreement.
This means that the LLC will be wound up, and all assets and liabilities will be disposed of according to the operating agreement.
Members must convene and cast a majority vote to pass this resolution. Written consent from Wisconsin LLC members should be kept in the records.
In the absence of an operating agreement, the Wisconsin LLC Act requires unanimous written consent from all members for the dissolution to be approved [1].
Read our article for more information on renegotiate a Wisconsin LLC operating agreement.
Step 2: Notify All Interested Parties
Notify all interested parties - creditors, banks, and clients - about your Wisconsin LLC dissolution and settle remaining obligations and unfinished services.
The entity must notify these people of its intent to dissolve by:
- Publishing a written notice in the newspaper for a month indicating that it intends to shut down operations.
- Sending a written notice to all known creditors and claimants.
Make sure to include the following:
- Your business name.
- The effective date when the LLC will cease its operations.
- The name and contact information of the individual who will be receiving claims.
Step 3: Close Your Business Tax Accounts
Business bank accounts must be closed, and all outstanding taxes must be paid by filing a final tax return. The LLC should work with its creditors to come to a resolution, if possible.
If you have a tax account with various financial institutions, you must close them. This includes the IRS account, state account, and local tax account.
Wisconsin Department of Taxation doesn't require LLCs to obtain tax clearance before they can dissolve. However, the failure to file the final tax return can result in penalties and interest.
Step 4: Settle Debts and Distribute Assets
If your LLC has any business debts remaining, they will need to be paid off before the dissolution process can be finalized.
After all the debts are settled, the remaining assets of the LLC after dissolution will need to be distributed among the members according to their ownership percentage.
The assets can be distributed in a few different ways:
- Cash can be paid out to each member
- The remaining assets can be transferred to the members' personal accounts
- The remaining assets can be used to create new LLCs or businesses.
Step 5: File Wisconsin LLC Articles of Dissolution
The dissolution of a Wisconsin LLC isn't complete until the company files the Articles of Dissolution with the Wisconsin Department of Financial Institutions [2].
This document contains information about the LLC's final day of operation, as well as the LLC name and registered agent.
There is a $20 fee to file Articles of Dissolution, which can be paid by check or money order payable to the Wisconsin Department of Financial Institutions.
The completed form, along with the required fee, can be submitted by mail to: the Department of Financial Institutions Division of Corporate and Consumer Services, P.O. Box 93348 Milwaukee WI 53293-0348.
Reasons to Dissolve a Wisconsin LLC
The reasons to dissolve an LLC may either be due to members' voluntary decision or state-imposed termination.
1. Voluntary dissolution of Wisconsin LLCs
The following are common reasons to dissolve an LLC in Wisconsin voluntarily:
- The company has reached its goals and dissolved as planned from the beginning.
- The business is no longer profitable or desirable.
- An owner wants to retire, and no one else can take over.
- There is a dispute among the owners that cannot be resolved.
2. Involuntary Dissolution of Wisconsin LLCs
When an LLC in Wisconsin is administratively dissolved, it means the LLC hasn't met statutory requirements.
The state can legally terminate the Wisconsin business if the entity failed to file Wisconsin LLC annual reports, pay business taxes, and the LLC hasn't maintained a Wisconsin registered agent.
All delinquent annual report fees or any other additional fee that hasn't been paid has to be paid in full before the LLC can officially begin the formal process of dissolution.
Other reasons why an LLC can get dissolved by the state are if the company is convicted of a felony, or ceases to do business in Wisconsin on a judicial basis.
FAQs
Do I Need Tax Clearance to Dissolve a Wisconsin LLC?
You don't need tax clearance to dissolve an LLC. However, you are required to pay all remaining obligations to the state.
Can I Dissolve a Foreign LLC in Wisconsin?
You can dissolve a foreign LLC in Wisconsin, but foreign corporations and LLCs have to file for the withdrawal, unlike a domestic Wisconsin LLC.
How Long Does It Take To Dissolve a Wisconsin LLC?
It takes up to one week to dissolve a Wisconsin LLC, but you can reduce the waiting time by opting for expedited processing. If you pay the additional filing fee of $25, you can shorten the processing period to only one business day.
How Much Does It Cost to Dissolve a Wisconsin LLC?
It costs $20 to dissolve an LLC. You must pay the fee to the Department of Financial Institutions Division of Corporate and Consumer Services.
Can You Reopen a Dissolved LLC in Wisconsin?
You can reopen a dissolved LLC in Wisconsin. You need to file an Application for Reinstatement with the state and pay all taxes and other penalties that are due by the time of filing if you missed any.
How Do I Close My Wisconsin Withholding Account?
Closing your Wisconsin withholding account is accomplished by visiting the Department of Revenue website and clicking on "My Tax Accounts." Select "Withholding Accounts." You will see a list of all the withholding accounts for businesses.
Find the account you want to close and click on the link. The form you need to fill out is called "the Request to Close Account."
Dissolution of an LLC in Wisconsin
Dissolving an LLC in Wisconsin can be completed by following the provisions and filing the necessary state requirements.
If you are not sure how to dissolve an LLC in Wisconsin or if you struggle with obtaining legal information about the dissolution process, don't hesitate to seek professional help from IncFile.
The company also offers additional services you can avail of after your business has been dissolved, including settling tax obligations and protection against creditors.
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References:
- https://docs.legis.wisconsin.gov/2003/statutes/statutes/183.pdf
- https://dfi.wi.gov/Documents/BusinessServices/BusinessEntities/Forms/CORP10.pdf
