How to Close an LLC in Washington State
Closing a Limited Liability Company (LLC) in Washington State involves several steps and requires careful attention to detail. This article will guide you through the process of closing an LLC in Washington and answer frequently asked questions related to this topic.
1. Dissolution of the LLC:
The first step in closing an LLC in Washington State is to dissolve the company. This can be done by following these steps:
a. Unanimous Member Approval: All members of the LLC must agree to dissolve the company. This can be done either through a written resolution or by holding a meeting where all members are present.
b. File Articles of Dissolution: Once member approval is obtained, you must file Articles of Dissolution with the Washington Secretary of State. This can be done online or by mail. The Articles of Dissolution must include the LLC’s name, date of dissolution, and a statement confirming that the LLC’s debts and liabilities have been resolved or will be resolved within a reasonable time.
c. Tax Clearance: Before filing the Articles of Dissolution, you must obtain tax clearance from the Washington Department of Revenue and the Internal Revenue Service (IRS). This ensures that all outstanding taxes and returns are filed and paid.
2. Winding Up the LLC:
After the dissolution process, you need to wind up the affairs of the LLC. This involves several tasks:
a. Notify Creditors and Settle Debts: Notify all creditors, including suppliers and lenders, about the dissolution of the LLC. Settle any outstanding debts and liabilities.
b. Liquidate Assets: Liquidate the LLC’s assets and convert them into cash. This may include selling property, inventory, or any other assets owned by the LLC.
c. Distribute Remaining Assets: After settling all debts, distribute the remaining assets among the LLC’s members according to their ownership percentages. This should be done in accordance with the LLC’s operating agreement or state laws if there is no agreement in place.
3. Canceling Licenses, Permits, and Accounts:
To fully close the LLC, you need to cancel any licenses, permits, and accounts associated with the business. This includes:
a. Business Licenses: Cancel any state and local business licenses obtained by the LLC.
b. Permits: Notify relevant authorities and cancel any permits the LLC may hold.
c. Accounts: Close all business bank accounts and credit lines associated with the LLC. Inform your suppliers, customers, and service providers about the closure of the business.
Frequently Asked Questions:
Q: Can I close an LLC without unanimous member approval?
A: No, unanimous member approval is required to dissolve an LLC in Washington State. All members must agree to the dissolution.
Q: How long does it take to close an LLC in Washington?
A: The time required to close an LLC in Washington State can vary. It depends on factors such as the complexity of the LLC’s affairs, the time taken to settle debts, and the efficiency of the filing process. It is advisable to start the process well in advance to allow ample time for all necessary steps.
Q: Are there any fees associated with closing an LLC in Washington?
A: Yes, there are fees involved in closing an LLC in Washington State. These include the filing fee for the Articles of Dissolution, tax clearance fees, and any fees associated with canceling licenses or permits.
Q: What happens if I don’t dissolve my LLC?
A: If you fail to properly dissolve your LLC, you may still be responsible for paying taxes, filing returns, and maintaining business licenses. This can result in penalties, fines, and other legal consequences.
Q: Can I reopen a dissolved LLC in the future?
A: Yes, it is possible to reinstate a dissolved LLC in Washington State. However, this process involves additional steps and fees. It is advisable to consult with an attorney or a business professional before considering reinstatement.
Closing an LLC in Washington State requires careful attention to detail and adherence to the legal requirements. By following the steps outlined in this article and seeking professional advice if needed, you can successfully close your LLC and ensure a smooth transition out of the business.