Don’t want to be held personally responsible for the liabilities that your Nevada LLC incurred during its lifetime? Closing it is the only viable solution. Here’s what you need to know about the process.
Dissolving an LLC in Nevada
When you started your business, you registered it with Nevada officials. Dissolution is the formal process of unregistering it with the same authorities.
Dissolution can occur of your own accord or involuntarily at the behest of a court. To take control and dissolve voluntarily, you’ll need to follow any rules that you outlined in your LLC operating agreement. For instance, you may have to vote with the company’s other members to decide whether you can dissolve. You might also need to comply with important procedures, such as letting voting members know about the dissolution meeting ahead of time.
What if you didn’t include dissolution rules in your operating agreement? In Nevada, you can leverage the LLC Actto dissolve the company simply by having all of the members agree in writing or vote unanimously to break up. No matter which route you end up following, you should record the final decision and the decision-making process in the notes of the voting meeting or in an independent form signifying that you obtained consent correctly.
Winding Up the Company
You’ve decided to dissolve the company, but the LLC still exists. The firm isn’t finished until you wind up the company, which includes steps like
- Distributing the remaining assets as necessary,
- Disposing the remaining property and conveying it to new owners,
- Accounting for remaining obligations and liabilities by collecting or discharging them, and
- Handling arbitration, prosecution, defense, negotiation or other tasks required to resolve outstanding lawsuits that involve the LLC.
These procedures don’t mean that you can just split whatever’s still in the company’s coffers with your other partners and walk off into the sunset. For instance, if you owe taxes or debts to creditors, then you should take care of them before using the assets for other things.
Members of the LLC who aren’t creditors should only receive proceeds from winding up after all other obligations have been satisfied. This means that you may want to talk to your legal adviser about the best sequence for completing the steps. If you’re dealing with ongoing legal actions, you’ll probably want to hold off on the other stages until you’re certain that a court isn’t going to find your LLC liable for settlements or judgments.
The Last Steps: Filing Articles of Dissolution
Just as you filed articles of organization to get the LLC going, you’ll have to file your articles of dissolution documentwith the state to finalize its invalidation. These documents cost $100 to file, and they need to include
- The name of the LLC,
- An order form that tells the state how to handle your articles,
- The date when you want your dissolution to become official, which can be up to 90 days after the filing,
- A statement confirming that all of the property and assets were properly distributed among members according to their interests and legal rights,
- A certification that you’ve closed all pending lawsuits in all court jurisdictions and satisfied judgment obligations, and
- A declaration that you’ve properly paid and discharged any liabilities, obligations or debts that the LLC was formerly responsible for.
Finally, remember that your articles of dissolution should be signed by a valid manager or member of the organization. If you previously registered to operate in other states, you’ll also have to file forms to terminate such registrations in those locales unless you want to keep being charged taxes and fees.