How to Dissolve an LLC in Hawaii – LLC Cancellation 2024 (original) (raw)

dissolve an LLC

Dissolving a business often involves complex procedures. However, for a limited liability company in Hawaii, dissolving it takes a handful of paperwork. When an LLC is formed in Hawaii, the owner(s) draft the operating agreement. If the owner(s) decide to dissolve the business, the dissolution takes place following the articles mentioned in the operating agreement.

In this article, LLCBuddy editors shared the ins and outs of dissolving an LLC in Hawaii. LLCs must file the Articles of Dissolution with the Hawaii Secretary of State like the formation certificate was filed at the time of forming an LLC in Hawaii. It takes a few days to process and a handful of fees to be paid to the SOS. Many people hire a professional service to do the paperwork to process it hassle-free.

How to Dissolve an LLC in Hawaii

At the time of forming an LLC, an operating agreement draft must be written. Generally, the process of dissolution takes place following the operating agreement (read: Hawaii LLC operating agreement). Before the dissolution process, there are a few things to consider in the LLC.

First, make sure all the members of the LLC agree to dissolve the business. Once all the members are ready, their consent should be recorded via voting. After casting their vote in favor of the dissolution, the legal process must be started.

Dissolution of Hawaii LLC requires three broad procedural steps. Having a Hawaii LLC Operating Agreement, closing all the tax accounts, and finally submitting the Articles of Dissolution form to the Hawaii Secretary of State.

Step 1: Follow the LLC Operating Agreement in Hawaii

operating agreement

When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. There is also a dissolution process, which is added to your agreement. The common dissolution steps that almost every LLC follows are:-

First of all, the dissolution vote will take place among the LLC members in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.

All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
After that, a formal date for dissolving the LLC will be decided.
The next step is counting the LLC assets and dividing them among the stakeholders and members accordingly.
Finally, the creditors of the business are notified, and the debts of the business are settled.

This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminating an LLC in Hawaii.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. Hawaii registered agent will guide you with everything you need to close your limited liability company. While choosing a registered agent make sure they have a physical street address in the state. A professional service provider helps you to file the Article of Dissolution and close your various tax accounts without any hassle. Below are the best LLC services in Hawaii that we strongly recommend for you.

LLC Service	Our Rating & Pricing	Top Features	Learn More
#1 TOP PICK	4.5/5 $0 + State Fees	100% accuracy guarantee Worry-free service Great customer support	Learn More
	4/5 $0 + State Fees	Free LLC Formation Affordable Add-on services Other business solutions	Learn More

Step 2: Close All Tax Accounts

Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts, especially business entity tax accounts, are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.

You must contact all government entities and clear the amount of outstanding taxes due by the date you have decided to dissolve. All the taxes must be paid in advance so that you don’t face any issues in the process of shutting down your LLC.

Some of the common taxes that limited liability companies have to pay are:

Unemployment insurance tax
Employee withholding tax if your LLC has employees.
If your LLC is engaged in selling taxable goods then they are liable to pay the sales and use tax.

Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close their accounts. Apart from business taxes, federal taxes, personal income taxes, and franchise taxes are to be considered. For the franchise taxes, a franchise tax form is required. That is why the LLC owner should go through the sales tax guide and hire an accounting service.

Tax clearance

While dissolving the Hawaii LLC, the owner is not required to obtain a tax clearance certificate. However, if you have filed federal taxes, then you must go through the final return option on your IRS form.

The IRS form for the LLCs that are classified as partnerships is Form 1065, and those LLCs who have registered themselves as corporate should check IRS Form 1120.

BOI Reporting

If you’re going to dissolve your LLC this year, make sure to update your BOI reporting. From January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) implied a rule to all businesses, including LLCs in Hawaii to file the BOI Report. The Beneficial Ownership Information (BOI) in Hawaii is a report that states about in and out of the company. This report must be up-to-date and submitted to the FinCEN before you proceed to the dissolution.

Step 3: File Articles of Dissolution

There is a list of dissolution documents that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. Like a Hawaii Articles of Organization, one has to file Hawaii LLC Articles of Organization. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.

articles of organization

First of all, the LLC owner(s) has to file the Article of Dissolution. There are multiple methods of filing available, such as filing by mail, in-person drop, or/and online filing.
You can follow the filing instructions on the official portal so that the steps for dissolution will be easier to complete.
For offline filing, LLCs must download the form and submit it to the Hawaii Secretary of State physical office along with the state filing fee.
If you want to dissolve Hawaii Foreign LLC then look for the Foreign LLC Dissolution process.
You must fill in all the important and legal information in the form, so you should be extra careful.
After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution filing fees.
After filling in every detail, one should submit the form through an official mail address and make a payment.

Filing	Forms and Details
Online Applications	Sign-in to SOS
Offline Applications	Articles of Termination
SOS Contact (if offline application is available)	Department of Commerce and Consumer Affairs, Business Registration Division, 335 Merchant St., P.O. Box 40, Honolulu, HI 96810
Filing Time	5 working days for standard filing. 1-3 working days for expedited filing.
Filing Fee	$25.00

The LLC you own is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call whether he accepts your expedited dissolutions or not.

Points to Be Noted When Dissolving an LLC in Hawaii

Apart from these three steps, no major dissolution rules are there in Hawaii. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.

Winding Up

Some purposes of LLC require some attention even after dissolution, known as winding up. The task of winding up includes.

For a certain period, the property of a business requires preservation.
If there is any civil case against the LLC, then the owner needs to finish them.
Settle all the existing disputes of LLC.
Transfer all the property of the LLC to the names of partners.
Release all the liabilities that the LLC owes to others.
Rightful distribution of all the assets among members, according to their percentage of partnerships.

Cost of Dissolving LLC

LLC costs in Hawaii include the formation as well as dissolution fees. To dissolve an LLC in Hawaii, LLCs have to file an Article of Dissolution. The filing fee is $25.00. The details are mentioned in the articles of dissolution filing form. Following are the ways to pay for the dissolution,

You can select a payment pick-up option.
There is an option for direct account transfer through your prepaid accounts.
LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction the state will make.

After Dissolving Your LLC

After you dissolve an LLC in Hawaii, you can reinstate or revive the same within a given time. In Hawaii, the LLC name will be available up to 120 days. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in Hawaii if that is available. According to the Hawaii SOS, you can revive your LLC within 2 years.

Reasons Behind Dissolving an LLC in Hawaii

People always think they can leave the company without any notice and there will be no issue. But if you have an LLC that you created with a legal obligation, it needs to be ended that way. Yes, if someone will dissolve an LLC in Hawaii, they will have to do it while taking care of the government. For dissolving the company, there is always a reason. The reason can be voluntary or involuntary too. Let’s get to know about the involuntary reasons,

If the company was caught doing illegal business.
If the company’s member died due to some reason or went bankrupt.
The dissolution will be mandatory if the assets of the business are used unwisely.
If the time being of the company was already determined in the will, then the company will go into dissolution at that time.

Top Businesses in Hawaii

With the population of 1,483,762, Hawaii is one of the favorable places to start an LLC. According to several reports, starting an LLC for Agriculture can be profitable as various places in the state showed steady growth in this business over the past few years. On the other side, based on the city or region you’re going to start your LLC, you can decide the type of business to start. Following are the top 5 businesses you can start in Hawaii.

Agriculture
Boutique Apparel
Information Technology
Homestay Services and Vacation Rentals
Travel Agency

Hawaii LLC Dissolution Review – A Quick Recap

Here’s a recap of the steps you must follow when dissolving your Hawaii LLC. Click on the steps in this list if you want to read the full details.

Follow Your Hawaii LLC Operating Agreement: Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
Close All Tax Accounts: Make sure you close all your tax accounts to avoid incurring further costs.
File Articles of Organization: File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.

FAQs

How do I officially dissolve my LLC in Hawaii?

To dissolve your LLC in Hawaii, you must file Articles of Dissolution with the Department of Commerce and Consumer Affairs (DCCA).

Can I dissolve my LLC online in Hawaii?

Yes, you can file for dissolution online through Hawaii’s Business Registration Division website.

What is the fee to dissolve an LLC in Hawaii?

The filing fee for dissolving an LLC in Hawaii is $25.

Do I need to be current on my taxes to dissolve my LLC in Hawaii?

Yes, you must be current on all state taxes in Hawaii before dissolving your LLC.

How long does it take to dissolve an LLC in Hawaii?

The processing time for LLC dissolution in Hawaii can vary, but it typically takes 5-7 business days.

Do I need to notify my creditors before dissolving my LLC in Hawaii?

Yes, it is recommended to notify all creditors and settle any outstanding debts before dissolving your LLC in Hawaii.

What happens to my LLC’s debts and obligations when I dissolve it in Hawaii?

Your LLC’s debts and obligations will typically need to be paid off or settled before the dissolution process is complete in Hawaii.

Can I reinstate my LLC in Hawaii after it has been dissolved?

Yes, you can apply for reinstatement of your LLC in Hawaii within 10 years of the dissolution date.

Is there a penalty for late filing of LLC dissolution in Hawaii?

There is no specific penalty for late filing of LLC dissolution in Hawaii, but it is important to notify the state as soon as possible.

Can I transfer my LLC to another state instead of dissolving it in Hawaii?

Yes, you can foreign qualify your LLC in another state instead of dissolving it in Hawaii if you plan to continue operating there.

Can I dissolve my foreign LLC that is registered in Hawaii?

Yes, you can dissolve a foreign LLC that is registered in Hawaii by following the same dissolution process as a domestic LLC.

Do I need to notify the IRS when dissolving my LLC in Hawaii?

Yes, you must notify the IRS by filing a final tax return and checking the box indicating that the LLC is being dissolved.

Can I dissolve my LLC in Hawaii if it is involved in a lawsuit?

Yes, you can still dissolve your LLC in Hawaii even if it is involved in a lawsuit, but you may need to settle the legal matters before proceeding with dissolution.

What documents do I need to file for LLC dissolution in Hawaii?

You will need to file Articles of Dissolution and any other required forms with the DCCA in Hawaii.

Can I dissolve my LLC in Hawaii if it is still profitable?

Yes, you can dissolve your LLC in Hawaii even if it is still profitable. The decision to dissolve is up to the members of the LLC.

Can I dissolve my LLC in Hawaii if it has outstanding penalties or fines?

Yes, you can still dissolve your LLC in Hawaii if it has outstanding penalties or fines, but they will need to be paid before the dissolution is complete.

Are there any special requirements for dissolving an LLC in Hawaii if it is a professional LLC?

Yes, if your LLC is a professional LLC in Hawaii (such as a law firm or medical practice), there may be additional requirements for dissolution.

Can I revoke a dissolution of my LLC in Hawaii once it has been filed?

Yes, you can typically revoke a dissolution of your LLC in Hawaii if it has been filed, but the process may vary depending on the circumstances.

Can I dissolve my LLC in Hawaii if it is in good standing?

Yes, you can dissolve your LLC in Hawaii even if it is in good standing with the state, as long as you follow the proper dissolution procedures.

What happens to my LLC’s assets when I dissolve it in Hawaii?

After settling debts and obligations, any remaining assets of the LLC will typically be distributed to the members according to their ownership interests in Hawaii.

Can I dissolve my LLC in Hawaii if it is in a partnership with another LLC?

Yes, you can dissolve your LLC in Hawaii if it is in a partnership with another LLC, but you may need to take additional steps to unwind the partnership agreement.

Can I dissolve my LLC in Hawaii if it has no activity or revenue?

Yes, you can dissolve your LLC in Hawaii even if it has no activity or revenue. It is important to officially close the business to avoid any future legal issues.

How do I dissolve an LLC in Hawaii?

To dissolve an LLC in Hawaii, you must file Articles of Dissolution with the Hawaii Department of Commerce and Consumer Affairs.

What is required to file Articles of Dissolution in Hawaii?

To file Articles of Dissolution in Hawaii, you will need to provide the name of your LLC, the date of dissolution, and a statement affirming that the dissolution has been approved by the appropriate parties.

Is there a fee to dissolve an LLC in Hawaii?

Yes, there is a fee to dissolve an LLC in Hawaii. The fee for filing Articles of Dissolution is $50.

Do I need to notify creditors before dissolving my LLC in Hawaii?

Yes, you are required to notify creditors before dissolving your LLC in Hawaii. You must give notice to all known creditors and publish notice in a local newspaper.

Are there any tax consequences to dissolving an LLC in Hawaii?

There may be tax consequences to dissolving an LLC in Hawaii, so it is important to consult with a tax professional before proceeding with the dissolution process.

What happens to the assets of an LLC when it is dissolved in Hawaii?

The assets of an LLC that is dissolved in Hawaii will be distributed to creditors and members according to the terms of the operating agreement or state law.

Can I dissolve my LLC in Hawaii if it is not in good standing?

In order to dissolve an LLC in Hawaii, it must be in good standing with the state. If your LLC is not in good standing, you will need to bring it up to date before proceeding with the dissolution process.

What is the deadline to dissolve an LLC in Hawaii?

There is no specific deadline to dissolve an LLC in Hawaii, but it is recommended to do so as soon as it is determined that the LLC should be dissolved.

In Conclusion

Dissolving a business is not an easy task as a lot of homework is involved with the process. The official process might have only a few steps, however, before and after dissolving the LLC, there might be a lot of other tasks. In this case, it is highly recommended to get a professional service. If you are looking to file an LLC at $0, then ZenBusiness is your answer.

Limited liability companies reduce owners’ personal liability. Having an LLC is quite cost-effective. However, if it is required to close down the business, then the dissolution process should be done legally. This article shared the general steps. Let us know if you have any queries.