Dissolution of Your Delaware LLC or Corporation Before the End of the Year
A Guide to Dissolution and Cancelling Your LLC
December is a month of both beginnings and endings. It’s the beginning of the holiday season, colder weather (north of the equator anyway), and the official beginning of winter. It’s also the end of both the calendar year and the fiscal year for most business entities, with the 4th Quarter wrapping up at the end of the month.
With December comes many dissolutions of businesses. Hey, don't get me wrong, we don't want to dissolve LLCs or corporations but people have many reasons for wanting to wind down their business. Delaware Business Incorporators has been helping clients both start new businesses and dissolve existing ones for over 30 years, so with December approaching we want to break down the steps to dissolving your business and why it’s important to do so before the new year.
Why You Should Dissolve Your Business in December
December is a crucial month for dissolution mostly because of the month following it -- January, or more specifically the New Year. With the 4th Quarter winding down, it’s important to start looking ahead and deciding what to do about your business’ goals moving forward. While it’s never easy to dissolve a business, if you’re considering doing so, December is the time to do it. That way, when you have to pay your business taxes the following year, you won’t have any overlap to deal with and you’ll only have to file one last corporate tax return.
How to Dissolve or Cancel Your Delaware LLC
Dissolving a business involves submitting the proper documentation along with paying a series of fees appropriate for your type of business. Dissolving a Delaware LLC involves a State of Delaware Certificate of Cancellation: a legal document that requires your business’ name, the Certificate of Formation, and an authorized date and signature. A legal document, the State of Delaware Certificate of Cancellation serves as the official document to mark the cancellation of your business. As a Delaware registered agent, Delaware Business Incorporators can handle the processing of certification and fees associated with cancellation.
What You Need to Know Before Dissolution
Before your start the dissolution process, there are a few key details that must be worked out.
- Confirm your company’s in "Good Standing" with the State of Delaware
Before you can move forward with dissolving your company, make sure that it’s actually in Good Standing to be cancelled. This means making sure that your company is in compliance with the state’s small business regulations and that your business has filed all reports and paid all the necessary taxes and fees with your state’s Secretary of State office. For Delaware, you can check the status of your entity online at the State of Delaware’s .
- Reinstate Your Company If Needed
In the event that your company has been voided by the state, you must in order to dissolve it. Sounds a bit counterproductive, right? Well, in order to legally dissolve a company it has to be in good standing. Typically companies are voided when they haven’t kept up to date with their . In Delaware, a LLC or corporation that hasn’t filed and paid its annual Franchise Tax report for two years in a row will automatically be voided.
So, if this is the case, what do you do? Reinstatement is fairly simple. First, you will have to file renewal documents with the Secretary of State, and pay any past due Franchise Taxes, late penalties, and interest fees. Once the renewal documents and fees have been successfully submitted and approved, the business entity is restored.
- Complete Your Annual Report (corporations only) and Pay and Past Due Fees
All Delaware annual report requirements must be filed prior to the submission of dissolution paperwork. Domestic corporations can file their annual reports and cover all tax payments online at the State of Delaware
How Delaware Business Incorporators Can Help
As a Delaware registered agent and incorporating expert in the State of Delaware, Delaware Business Incorporators is happy to help you through the process of cancelling your Delaware LLC. Our process is simple, efficient, and affordable with a $185 processing fee plus Delaware filing fees, back taxes, penalties, interest, and any reinstatement fees. If you’re looking to dissolve your business, or have any questions regarding the dissolution process, you can visit our Dissolution Page here or contact our office and speak to one of our registered agents at 1-800-423-2993 or 302-996-5819.