There are a lot of situations where dissolving your LLC might be needed. You could be shutting down your business, changing hands, or simply changing entity types. Whatever your reason, there are a few key considerations for dissolving your LLC.
Nearly all the information you need regarding dissolving your LLC is found in Chapter 57D of the NC General Statutes.
Let’s walk you through this process!
Get Member Approval
The first step is getting LLC Member approval. If your operating agreement doesn’t say how to dissolve the company, you need unanimous approval to dissolve. Fortunately, you can set your own rules in your operating agreement.
File Articles of Dissolution
After you get your member approval, but before you notify your creditors, you file the articles of dissolution with the Secretary of State. This document only asks for four pieces of information and a signature.
Notify Known Creditors
Next, you need to notify known creditors of the LLC that you are dissolving. By sending them a notice that contains all the required components of § 57D-6-10, you’re creating an end-date for when those creditors can come after the LLC or its members. If done properly, that end-date becomes 120 days of the date of the notice.
After that, you need to publish notice of the dissolution in a newspaper of general circulation in the county where the LLC’s principal office is or was last located. Fortunately, you only need to publish this notice once in the newspaper. This creates a five year end-date for all claims. This step just helps prevent the unknown from biting you years down the road for something huge like wrongful death or fraud.
Keep Money Set Aside
If you know there are claims coming, you need to set aside money to handle those claims. Otherwise, you risk opening up personal liability for the members. You don’t want that! As long as you’re winding up the company, it can continue to operate in a limited capacity.
Dissolving a company is straightforward. If you follow these steps, you’ll limit your exposure and know you’re protected.