Delaware LLC Dissolution | Corporate Dissolution Services
Delaware LLC Dissolution
In this section, we'll discuss Delaware's statutue that governs dissolution/cancellation, form required, checklist and process, deadlock procedures, resolution, and fees.
There are many reasons why you may want to undertake a Delaware LLC dissolution (aka cancellation). Sometimes a LLC needs to be dissolved because the owner wishes to retire. Or, the business is no longer profitable. Other times the purpose for having the LLC has changed and the dissolution date stated in the operating agreement is near.
It's important to dissolve your LLC the correct way. Sometimes you'll need the legal advice of a competent Delaware attorney.
The Delaware statute regarding dissolution lays out the framework for dissolving your LLC. A LLC is dissolved and its business dealings concluded when one of the following occurs:
- Date stated in the operating agreement
- When a certain set of events occur that have been specified in the operating agreement
- When the members representing 2/3 of the ownership percentage vote or consent to dissolve the company
- At any time there are no members
- Delaware Court of Chancery may decree a dissolution of the LLC upon application by or for a member of manager. (See section § 18-802 of the Delaware code.)
The full Delaware dissolution statue can be found here.
Checklist and Process
To dissolve a LLC in Delaware, you'll need to follow the following checklist:
- Prepare and file articles of dissolution including the name of LLC of the exact date of formation with the Delaware Secretary of State.
- Have an authorized signer sign and date the certificate.
- Check with the state regarding any past due franchise taxes, penalties and interest that may be due. These fees must be paid before you can file the cancellation.
- If you plan on dissolving your business entity, you should file your certificate prior to December 31. If you dissolve on or after January 2, you'll be obligated to pay the Delaware LLC franchise tax for another year.
- There are NO annual reports to file.
- Submit a state fee of $200 and the executed certificate with the State of Delaware.
- You may request a certified copy of the "stamped" filed certificate for an additional fee of $50.
- Expedited services are also available from the state.
There is no deadlock provision existing in the Delaware statutue when a LLC is owned 50/50 by two different members. Members of the LLC would need to petition the Chancery Court to dissolve the LLC. LLCs do not have a board of directors.
Review your LLC operating agreement if you plan to voluntarily dissolve your LLC. Most operating agreements contain a section regarding the rules for dissolving a LLC. In most cases, the members will need to vote. There may also be a requirement that a certain percentage of members must vote in favor of the resolution. It's important to follow procedural requirements such as setting a certain time to vote and giving advance notification to all members regarding the dissolution meeting.
Corporate Resolution Form
The dissolution form that the State of Delaware uses requires several pieces of information. You'll need to indicate the name of the company and the exact date the LLC was formed. The resolution form must be signed and dated by an authorized signer of the LLC.
To dissolve a LLC, you must pay any past due franchise taxes, penalties and interest. Once these fees are paid, there is a one-time filing fee of $200.
We hope this section has been beneficial to you. If you have any questions, please do not hesitate to call us at 1-800-423-2993 or 302-996-5819. Thank you for your interest in Delaware limited liability company LLC dissolution.
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