How to Dissolve an LLC in Wisconsin? (Step by Step Guide)
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.
- To complete the dissolution process you must file the Articles of Dissolution with the Wisconsin Department of Financial Institutions.
- Considering the Lending Tree data indicating a 23.5% business failure rate within the first year in Wyoming, Wisconsin LLC owners should be well-prepared for all outcomes, including the structured dissolution process outlined for Wisconsin businesses.
- In my view, the dissolution of an LLC in Wyoming, while a clear-cut legal process, underscores the importance of thorough preparation and the value of professional guidance in closing a chapter on one's business journey.
6 Steps to Dissolving an LLC in Wisconsin
With over 457,769 small businesses making up 99.4 percent of Wisconsin's business landscape as per the 2023 Small Business Administration stats, limited liability companies (LLCs) play a pivotal role in the state's economy [1].
As such, the decision to dissolve an LLC not only affects the business owners and employees but also has broader implications for the state's economic health.
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: Vote to Dissolve the LLC
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.
When we were winding up our company, all members convened and casted 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 [2].
Read our article for more information on renegotiate a Wisconsin LLC operating agreement.
Step 2: Notify Creditors About Your LLC's Dissolution
In Wisconsin, as part of the LLC dissolution process, you are required to inform all known creditors of your intent to dissolve. The purpose is to allow creditors to present any claims against the LLC before it ceases to exist.
The notice to creditors should be in writing and should clearly state that the LLC is in the process of dissolving.
Our written notice also informed creditors of the deadline by which they must submit their claims; this deadline cannot be less than 120 days from the date of the notice.
The notice should include the mailing address where creditors can send their claims and a statement that claims will not be considered if received after the deadline.
Step 3: File Final Tax Returns and Obtain Tax Clearance
Filing final tax returns and obtaining tax clearance ensures that the LLC has met all its tax obligations before it formally ceases to exist.
You need to file a final federal tax return with the IRS to alert them that your LLC will no longer be filing returns in subsequent years.
Similarly, file a final tax return with the Wisconsin Department of Revenue.
Before we could obtain tax clearance, we had to pay all outstanding taxes, including any back taxes, interest, or penalties that the LLC owed.
In Wisconsin, obtaining a tax clearance certificate is an important step. This certificate is proof that your LLC has no outstanding tax liabilities.
"To secure a tax clearance certificate, one must approach the Wisconsin Department of Revenue, ensuring that all final tax returns are duly submitted and every owed tax is fully settled."
-Jon Morgan, Co-Editor & Co-Founder of Venture Smarter
Step 4: File Articles or Certificate 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 [3].
During our filing, we provided information about our LLC's final day of operation, as well as the LLC name and registered agent on this document.
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.
Step 5: 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 6: Close All Accounts and Cancel Licenses and Permits
Closing all accounts and canceling licenses and permits is a crucial final step in dissolving an LLC.
This involves a thorough review and closure of all business-related financial accounts, including bank accounts, credit lines, and merchant services. Outstanding balances should be settled before account closure.
Additionally, it's essential to inform and terminate services with all service providers, such as utilities and subscriptions.
The LLC must also cancel any business licenses and permits by contacting the relevant issuing agencies, ensuring that there are no ongoing compliance obligations or fees.
This includes notifying state and local government agencies, like the Department of Revenue and Secretary of State, about the business closure
FAQs
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.
Do I Need Tax Clearance to Dissolve a Wisconsin LLC?
No, you don't need tax clearance to dissolve an LLC. However, you are required to pay all remaining obligations to the state.
References:
- https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-WI.pdf
- https://docs.legis.wisconsin.gov/2003/statutes/statutes/183.pdf
- https://dfi.wi.gov/Documents/BusinessServices/BusinessEntities/Forms/CORP10.pdf
Hello, My parent’s began an LLC and put some rural land into it. With my father passing, my mother sold us the property or in essences my two brothers and I purchased the LLC holding the property. We were told to secure a new EIN number for tax purposed. However the government request for a new EIN makes it a general partnership?? How do we address this? This property is in a number of government programs such as CRP and contracts are in place. However in updating these the agency’s are indicated the EIN form say partnership and none of the forms are now acurate?
Since you and your brothers now own the LLC together, it is classified as a partnership, which is why the new EIN application reflects this status. Use the new partnership EIN for all government programs and update your records accordingly. If this classification is not suitable, consult a tax professional to explore other options like electing to be taxed as a corporation.