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

dissolve an LLC

Dissolving a business often involves complex procedures. However, for a limited liability company in Pennsylvania, dissolving it takes a handful of paperwork. When an LLC is formed in Pennsylvania, 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 Pennsylvania. LLCs must file the Articles of Dissolution with the Pennsylvania Secretary of State like the formation certificate was filed at the time of forming an LLC in Pennsylvania. 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 Pennsylvania

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

Step 1: Follow the LLC Operating Agreement in Pennsylvania

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 Pennsylvania.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. Pennsylvania 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 Pennsylvania 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
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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 Pennsylvania 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 Pennsylvania to file the BOI Report. The Beneficial Ownership Information (BOI) in Pennsylvania 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 Pennsylvania Certificate of Organization, one has to file Pennsylvania LLC Certificate 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 Pennsylvania Secretary of State physical office along with the state filing fee.
If you want to dissolve Pennsylvania 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	Not Applicable
SOS Contact (if offline application is available)	Pennsylvania Department of State, Bureau of Corporations and Charitable Organizations, P.O. Box 8722, Harrisburg, PA 17105
Filing Time	Minimum 30 working days and maximum 60 working days
Filing Fee	$70

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 Pennsylvania

Apart from these three steps, no major dissolution rules are there in Pennsylvania. 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 Pennsylvania include the formation as well as dissolution fees. To dissolve an LLC in Pennsylvania, LLCs have to file an Article of Dissolution. The filing fee is $70. 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 Pennsylvania, you can reinstate or revive the same within a given time. In Pennsylvania, the LLC name will be available up to the time till SOS dissolves the LLC completely. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in Pennsylvania if that is available. According to the Pennsylvania SOS, you can revive your LLC anytime up to last year. As of 2024, the SOS has stopped reinstating LLCs. You must file a formation document afresh to get a new LLC.

Reasons Behind Dissolving an LLC in Pennsylvania

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 Pennsylvania, 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 Pennsylvania

With the population of 13,092,796, Pennsylvania is one of the favorable places to start an LLC. According to several reports, starting an LLC for Clothing Boutique 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 Pennsylvania.

Clothing Boutique
Towing Company
Convenience Store
Health care Business
Internet Service Provider

Pennsylvania LLC Dissolution Review – A Quick Recap

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

Follow Your Pennsylvania 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 Certificate 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 dissolve an LLC in Pennsylvania?

To dissolve an LLC in Pennsylvania, you must file a Certificate of Dissolution with the Department of State.

Can I dissolve my Pennsylvania LLC online?

Yes, you can file the Certificate of Dissolution online using the Pennsylvania Department of State website.

Is there a fee to dissolve an LLC in Pennsylvania?

Yes, there is a fee to file a Certificate of Dissolution for an LLC in Pennsylvania. The fee may vary depending on the method of filing.

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

The processing time for dissolving an LLC in Pennsylvania can vary, but it typically takes a few weeks to complete the process.

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

Yes, you must inform the IRS that your Pennsylvania LLC has been dissolved by filing a final federal tax return.

What are the consequences of not properly dissolving an LLC in Pennsylvania?

If you fail to properly dissolve your LLC in Pennsylvania, you may continue to be liable for fees, taxes, and other obligations, even though the business is no longer operating.

Do I need to notify creditors when dissolving my Pennsylvania LLC?

It is recommended to notify creditors and other interested parties when dissolving your Pennsylvania LLC to ensure all obligations are properly dealt with.

Can I reinstate my Pennsylvania LLC after it has been dissolved?

Yes, you can apply for reinstatement of your Pennsylvania LLC within a certain period after it has been dissolved, but you may need to fulfill certain requirements.

What documents do I need to dissolve my Pennsylvania LLC?

To dissolve an LLC in Pennsylvania, you will need to file a Certificate of Dissolution, which includes information about the company and its members.

Can I dissolve my Pennsylvania LLC if it has outstanding debts?

Yes, you can dissolve your Pennsylvania LLC even if it has outstanding debts, but you may still be responsible for settling those debts.

Will I receive confirmation once my Pennsylvania LLC has been dissolved?

Yes, once your LLC has been properly dissolved in Pennsylvania, you will receive confirmation from the Department of State.

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

Dissolving your Pennsylvania LLC does not necessarily end any ongoing lawsuits involving the company. You may still need to address legal matters even after dissolution.

Can I dissolve my Pennsylvania LLC if it is still making a profit?

Yes, you can dissolve your Pennsylvania LLC even if it is still making a profit. The decision to dissolve the company is not dependent on its financial status.

Do I need to cancel my Pennsylvania LLC’s business licenses and permits when dissolving it?

Yes, you must cancel any business licenses and permits associated with your Pennsylvania LLC when dissolving the company to avoid any potential legal or financial issues.

What happens to the assets of my Pennsylvania LLC after it has been dissolved?

After dissolving your Pennsylvania LLC, the remaining assets, if any, will be distributed among the members according to the company’s operating agreement or state law.

Can I transfer the assets of my Pennsylvania LLC to another entity before dissolving it?

Yes, you can transfer the assets of your Pennsylvania LLC to another entity before dissolving it, but make sure that you follow all legal requirements for such a transfer.

Do I need to notify customers and clients when dissolving my Pennsylvania LLC?

It is advisable to inform customers and clients about the dissolution of your Pennsylvania LLC to avoid any misunderstandings or obligations after the company ceases to exist.

Can I dissolve my Pennsylvania LLC if it has employees?

Yes, you can dissolve your Pennsylvania LLC even if it has employees, but you must follow all labor laws and regulations when terminating their employment.

What tax obligations do I have when dissolving my Pennsylvania LLC?

When dissolving your Pennsylvania LLC, you must settle all outstanding tax obligations, including filing final state and federal tax returns and paying any taxes owed.

Can I dissolve my Pennsylvania LLC if it is in good standing with the state?

You can dissolve your Pennsylvania LLC regardless of its current standing with the state, but it is recommended to ensure all compliance matters are addressed before dissolution.

Do I need a lawyer to dissolve my Pennsylvania LLC?

While you are not required to have a lawyer to dissolve your Pennsylvania LLC, seeking legal advice can help you navigate the process and ensure everything is done correctly.

Can I dissolve my Pennsylvania LLC if it is a partnership?

Yes, you can dissolve your Pennsylvania LLC if it is a partnership, but all partners must agree to the dissolution and follow the proper procedures outlined by state law.

What is the deadline for filing a Certificate of Dissolution for my Pennsylvania LLC?

There is no specific deadline for filing a Certificate of Dissolution for your Pennsylvania LLC, but it should be done promptly after making the decision to dissolve the company.

Can I revive my Pennsylvania LLC after it has been dissolved?

Yes, you may be able to revive your Pennsylvania LLC after it has been dissolved by filing for reinstatement and meeting any additional requirements set by the state.

Can I dissolve my Pennsylvania LLC if it is in debt?

Yes, you can dissolve your Pennsylvania LLC even if it is in debt, but you must address the outstanding debts during the dissolution process to avoid any liabilities.

Can I dissolve my Pennsylvania LLC if it is suspended by the state?

It is advisable to resolve any issues causing the suspension of your Pennsylvania LLC before proceeding with the dissolution, as the state may require you to address those matters.

Can I transfer the liabilities of my Pennsylvania LLC to another entity before dissolving it?

It is not recommended to transfer liabilities from one entity to another without proper legal guidance, as you may still be held responsible for those liabilities even after dissolution.

Do I need to publish a notice of dissolution for my Pennsylvania LLC?

In Pennsylvania, you are not required to publish a notice of dissolution for your LLC, but it is a good practice to inform stakeholders and the public about the company’s dissolution.

Can I dissolve my Pennsylvania LLC if it has no assets or activity?

Yes, you can dissolve your Pennsylvania LLC even if it has no assets or activity, as long as you follow the proper procedures for dissolution outlined by the state.

What is the filing fee for dissolving an LLC in Pennsylvania?

The filing fee for dissolving an LLC in Pennsylvania is $70.

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.