When it’s time for a new chapter, closing your New York limited liability company (LLC) properly is crucial. Whether you’re looking to move on to new ventures or simply stepping away from your current business, understanding the dissolution process ensures that you meet all legal obligations and avoid future complications. Here’s a comprehensive guide to help you dissolve your New York LLC smoothly.

Deciding to Dissolve Your LLC

Dissolving an LLC means formally ending its existence as a legal entity and ceasing all business operations. While another party could take over, the dissolution of your LLC represents a final conclusion to your involvement.

Dissolution can occur for various reasons. A court order might require you to dissolve, but more often, it’s a voluntary decision. Voluntary dissolution gives you control over the process, allowing you to:

• Break up the company according to your preferences.
• Follow the dissolution procedures outlined in your operating agreement.
• Decide how to handle remaining assets and liabilities.

If you choose to dissolve voluntarily, start by reviewing your operating agreement. This document typically provides guidance on how to proceed, including:

• Notifying members and owners about a vote on dissolution.
• Achieving a majority consensus if the agreement doesn’t specify other procedural rules.
• Documenting the decision-making process through consent forms or meeting minutes.

Filing for Dissolution

Once you’ve decided to dissolve and obtained agreement from all relevant parties, you must inform the state of New York. This formal filing process legally recognizes your decision to dissolve.

You have 90 days from the date of the dissolution agreement to file your Articles of Dissolution with the New York Department of State. This filing requires a $60 fee and includes providing specific information, such as:

• Your LLC’s official name.
• Any previous names if the LLC’s name has changed since its founding.
• A description of the event that led to the decision to dissolve.
• The signature of the individual filing the documents.

Additionally, you’ll need to designate a point of contact for correspondence related to the dissolution. This doesn’t have to be an in-state address, but it should be somewhere you can reliably receive mail.

Managing Taxes and Winding Up

Although you’re not required to settle all tax liabilities before dissolving, it’s wise to do so. Completing your state tax returns, NYS-45 quarterly employee withholding forms, and sales tax returns can help you avoid potential legal issues. When filing your federal tax Form 1065, be sure to indicate that it’s the final return for your LLC.

After deciding to dissolve, you must also “wind up” the LLC’s affairs. This process involves addressing any remaining business matters before the LLC can legally close, including:

• Settling outstanding liabilities.
• Resolving any ongoing lawsuits.
• Closing business operations and contracts.
• Disposing of property and transferring it to the appropriate parties.
• Distributing any remaining assets to the LLC’s members.

The order of these tasks is important. For example, you must pay off creditors before distributing assets to members. It’s also advisable to calculate fair distribution terms for all members and creditors before resolving individual claims.

Finally, remember that these guidelines apply specifically to New York. If your LLC was operating as a foreign entity in another state or doing business elsewhere while being domiciled in New York, you’ll need to file the appropriate termination documents or dissolution paperwork in those jurisdictions as well.