All businesses, whether they are LLCs or not, eventually come to an end. In some cases, the business owners may choose to dissolve the company voluntarily. In other cases, the company may be forced to dissolve due to financial problems or legal issues. If you are a business owner and are thinking about dissolving your Limited Liability Company, here is what you need to know.
Step 1: Follow Your Wyoming LLC Operating Agreement
A Wyoming LLC operating agreement is a comprehensive guide you acquired when you started a Wyoming Limited Liability Company as a business entity. It covers the fundamental functions of an organization, including how to construct and operate as a business and the process of dissolving it.
Most operating agreements of Wyoming LLCs outline the process for LLC dissolution. If not, you may get further information from the Wyoming Secretary of State.
Wyoming LLC, like most LLCs, follows the standard dissolution process, which begins with a meeting and voting among LLC members. Most LLC members must agree to dissolve your Limited Liability Company to pursue dissolution legally. It is also imperative that the meeting minutes where votes are taken and resolutions proposed are all recorded.
Once everyone has cast their votes, you may begin:
- Determining the official date of dissolution
- Distributing the remaining LLC assets after dissolution among the stakeholders and members
- Notifying creditors and settling any business debts
Step 2: Close All Tax Accounts
LLCs in Wyoming are not required to acquire a tax clearance certificate before dissolving. However, it is crucial to make sure that minimum business taxes are fulfilled before the LLC dissolves to avoid fines or other penalties from being imposed on you.
Some of the common taxes owed by Wyoming limited liability companies:
- Sales & Use Tax Accounts
- Employee Withholding Tax Accounts
- Unemployment Insurance Tax Accounts
- State Income Tax Accounts
- Local Tax Accounts
Closing these tax accounts is usually done by completing a final tax return with the concerned tax agency, although some accounts may require additional file paperwork. For one, if you have filed federal taxes, then you must complete the final return option on your IRS form, which is classified either as partnerships or as corporate.
Business Account Clearance
Dissolving a Wyoming Limited Liability Company also entails closing all bank accounts, canceling 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 Wyoming LLC Articles of Dissolution
After completing the initial procedures, you must file articles and, in this case, the Wyoming Articles of Dissolution with the Wyoming Secretary of State. The application form is available for request at the Secretary of State Website of Wyoming state website. Download that pdf form and fill in all the important and legal information in the dissolution form.
For dissolving a domestic Wyoming 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. In any case that there are foreign LLCs in states other than Wyoming that are affiliated to the domestic Wyoming LLC, you must dissolve each foreign entity before legally dissolving your domestic LLC.
Once you're done filling out the important information in the dissolution documents, select the payment method you want to pay the Wyoming LLC dissolution filing fee of $50. 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 Wyoming LLC will cease to exist after this form has been submitted and processed.
Reasons for Wyoming LLC Dissolution
Dissolved LLCs in Wyoming may happen due to a variety of reasons. The most common reason is a voluntary decision by the LLC's members. Other times, the Wyoming Secretary of State can impose dissolution on an LLC.
There are many reasons people would want to dissolve their Wyoming 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. The following are some of the most common reasons:
- 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 critical clients.
This occurs when the Wyoming LLC fails to comply with state regulations, such as failing to file an annual report or pay taxes.
3 Main reasons the State of Wyoming may subject your LLC to a dissolution:
- Failure to file your Annual Report
- Failure to pay the Annual Fee ($60)
- Failure to maintain a Registered Agent in Wyoming
The Wyoming Secretary of State office will notify your registered agent if you fail to fulfill the above requirements. They may also impose fines and fines on you. Your LLC will not be dissolved if payment is made within 60 days.
However, after that period has passed, the Wyoming Secretary of State will initiate Administrative Dissolution, and your LLC will no longer be able to transact business in Wyoming legally. The State, on the other hand, will safeguard your company for two years after it is dissolved.
What Is the Cost to Dissolve an LLC in Wyoming?
LLC dissolution process in Wyoming is not instantaneous but is usually completed within 3 to 5 business days. Once you have checked off the initial process of following the Wyoming LLC operating agreement and closing all tax accounts, you must file articles of dissolution to the Wyoming Secretary of State.
Only then will the Wyoming Secretary of the State process the paperwork and distribute any remaining assets among its members. Once you have divided the remaining business assets, you must declare the distribution to the IRS.
However, it is crucial to know that when you dissolve a Wyoming LLC, all company licenses, registrations, and permits do not automatically expire. Dissolving a Wyoming company simply entails paying all due taxes and fees.
Related Article: How to Start an LLC in Wyoming?
How Much Is the Filing Fee to Dissolve a Wyoming LLC?
The Articles of Dissolution filing fee due to the Wyoming Secretary of State is $50.
What Is the Penalty if I Just Walk Away From My Wyoming LLC?
Walking away from your LLC without proper termination will later hit you with unexpected expenses. If you do not file your overdue report within 60 days of the due date, the Wyoming Secretary of State will initiate forced dissolution and suspend business operations.
Then if your LLC is administratively dissolved, you must file a reinstatement application with the Secretary of State, which costs $50. You will also be charged $50 in filing fees for missed annual reports. Failure to pay the reinstatement fee is expensive and may jeopardize the company's future. It will be recorded as a delinquent business, reflecting poorly on the company's owner.
And depending on the nature of your business, these measures may only be the tip of the iceberg.
Do I Need a Tax Clearance Before Dissolving an LLC in Wyoming?
No. The Wyoming Secretary of State does not require Wyoming business entities to obtain tax clearance before dissolving your Wyoming LLC.
Can I Reinstate My LLC After It’s Been Administratively Dissolved?
Yes. You have 2 years to pay any penalties and expenses related to your dissolution. Your Wyoming LLC is considered Defunct during this time period, but the Secretary of State is prepared to enable it to be Reinstated. Once that time period has passed, you may no longer reestablish your Wyoming LLC and must start over.
Dissolving a Wyoming LLC: Conclusion
If you're looking to dissolve an LLC in Wyoming, it's important to do so legally. The process may seem complicated, but it isn't. By following the steps we outlined in this article, you can close your LLC without any issues.
However, if you don't want to deal with all the paperwork and any unnecessary delays, it is best to consult with an experienced attorney who can help guide you through the process. Contact us today for more information or to schedule a consultation.