Dissolving a Business in Connecticut 2024: A Step-by-Step Guide

by
How to Dissolve a Business in Connecticut

Closing an LLC in Connecticut may be a tough decision, but our comprehensive guide is here to help and make the process smooth and worry-free. Understanding the dissolution process is crucial for avoiding future legal and financial liabilities, whether due to financial circumstances or new ventures. Let us be your trusted partner in this final phase of your LLC journey, ensuring seamless closure and protection against liability concerns.

Embark on this final step confidently, as our expert advice guides you through the requirements, procedures, and best practices of dissolving your business in Connecticut. Navigate legal formalities, manage outstanding obligations, and file the necessary paperwork with ease, all with the support of LLCBase. Tackle this challenge with us and achieve a secure and successful closure in the ever-changing Connecticut business landscape.

Dissolve a Business

What is a Business Dissolution

Connecticut LLC Dissolution refers to the process of legally ending the existence of a Limited Liability Company (LLC) registered in the state of Connecticut. Dissolving an LLC involves several steps, such as following the LLC’s operating agreement, obtaining necessary approvals from members, settling outstanding debts and taxes, and filing the required dissolution documents with the Connecticut Secretary of State.

The dissolution process ensures that the LLC is no longer legally recognized as a separate entity and cannot conduct business activities. Properly dissolving an LLC in The Constitution State is essential to avoid potential legal and financial liabilities for the members involved.

Taking the leap to dissolve your LLC? Let LegalZoom simplify the process for you with their expert guidance and support. They will help you navigate the complexities of business dissolution, ensuring a smooth, stress-free experience.

Recommended: When dissolving a business, we recommend hiring a business dissolution expert to confidently embark on this significant change. Say goodbye to business hurdles and hello to a seamless dissolution process! We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online LLC Setup

Dissolve Your Business in Connecticut: 4-Step Guide

Let’s walk you through a 4-step guide to help you dissolve your business in Connecticut efficiently and effectively:

Step 1: Follow Your Connecticut Operating Agreement

You should have drafted an operating agreement when you initially formed an LLC. This document outlines the procedures and rules for how the business will be managed and operated. The operating agreement should also include information on how to dissolve the LLC.

Consider hiring one of the best business attorneys in Connecticut for top-notch legal assistance while dissolving a business. You may also seek the help of a professional LLC formation service to help you in this major move of your business.

LLC Services

Rating & Pricing

Top Features

Learn More

#1 Editor's Choice
Legalzoom

$0 + State Filing Fee

  • Free LLC Formation

  • Various Legal Services

  • Attorney Advice

Learn More

$299 + State Filing Fee

  • Single Package

  • Flat Pricing

  • Legal Services

Learn More
Consult Your Operating Agreement

The LLC operating agreement is a crucial document governing your Connecticut LLC’s management, operation, and dissolution. It is a legally binding contract between the LLC members, outlining their rights, responsibilities, and obligations.

When you dissolve your Connecticut LLC, the first step is to consult your operating agreement. Carefully review the specific provisions related to dissolution and winding up the business. This section should outline the necessary steps, conditions, and requirements for the members to dissolve the LLC properly.

Determine the Required Approvals and Procedures

Upon reviewing the operating agreement, you must identify the required approvals and procedures for dissolution.  These may vary depending on the terms agreed upon by the LLC members.  Common approval methods include:

  • Unanimous Written Consent: In some cases, the operating agreement may require all members to provide written consent for dissolution.
  • Majority Vote: More commonly, the operating agreement will require a majority vote of the members to approve the dissolution. The agreement should specify the percentage needed for approval (e.g., a majority of 51% or a supermajority of 66%).
  • Specific Conditions: The operating agreement may outline specific conditions or events that trigger the dissolution process, such as the death or withdrawal of a member, bankruptcy, or reaching a predetermined end date.
Document the Decisions and Approvals

Once you have determined the proper procedure for dissolution, follow the steps outlined in the operating agreement. It is essential to document all decisions and approvals related to the dissolution of your Connecticut LLC. This documentation may include the following:

  • Written consent signed by all members.
  • Meeting minutes reflecting the discussion and vote on dissolution.
  • Any other written records or correspondence related to the dissolution decision.

Maintaining accurate records of the decisions and approvals is crucial. They will be necessary when filing the dissolution documents with the Connecticut Secretary of State. They may be required in case of a dispute or legal issue related to the LLC’s dissolution.

Step 2: Close All Tax Accounts

Before you can dissolve your Connecticut LLC, you must ensure that all outstanding debts and taxes are settled.

Settle Outstanding Debts and Taxes

Before dissolving your Connecticut LLC, settling all outstanding debts and taxes is essential to avoid potential legal and financial liabilities. You must address any balances due to the Connecticut Department of Revenue Services, Connecticut Department of Labor, and other state or federal agencies that may apply to your business operations.

  • Connecticut Secretary of State: Ensure you have paid any outstanding franchise taxes and fees, including the annual Connecticut LLC tax and any additional taxes that apply to your business.
  • Employment Development Department: If your LLC has employees, ensure you have paid any required payroll taxes and filed all necessary employment tax returns with the Connecticut Department of Labor.
  • Other Agencies: Depending on your business activities, you may need to settle outstanding debts with other state or federal agencies, such as the Internal Revenue Service (IRS), for federal taxes.
File Final Tax Returns with the Connecticut Department of Revenue Services

After settling all outstanding debts and taxes, you must file your final tax returns with the Connecticut Department of Revenue Services. This process involves:

  • Filing a Final Tax Exemption Certificate: Complete and submit the Limited Liability Company Return of Income (Tax Exemption Certificate) for the final tax year of your LLC’s existence. Indicate on the form that it is your final return, and report all income, deductions, and credits associated with your LLC’s activities during the tax year.
  • Paying Remaining Balances: Along with filing your final Tax Exemption Certificate, ensure that you pay any remaining balances due to the Connecticut Department of Revenue Services, including any late fees or penalties that may apply.
  • Closing Tax Accounts: Inform the Connecticut Department of Revenue Services that you are dissolving your LLC and request the closure of your tax accounts. This is important to avoid any confusion or future tax obligations related to your dissolved LLC.

By properly closing all tax accounts and filing your final tax returns, you can ensure a smooth dissolution process and avoid any potential legal and financial issues arising from unresolved tax obligations.

Step 3: File a Certificate of Dissolution

Once all necessary approvals have been obtained and all tax accounts have been closed, you can officially dissolve your Connecticut LLC by filing a Certificate of Dissolution with the Connecticut Secretary of State.

Complete the Certificate of Dissolution 

To officially dissolve your Connecticut LLC, you must complete and file the Certificate of Dissolution with the Connecticut Secretary of State. This form is available on the Secretary of State’s website and requires the following information:

  • LLC Name: Provide the exact name of your LLC as it appears on your Certificate of Organization.
  • Secretary of State File Number: Include the LLC’s file number assigned by the Connecticut Secretary of State.
  • Dissolution Date: Specify the effective date of dissolution, which can be the filing date or a future date not more than 90 days from the filing date.
  • Signatures: Include the signatures of all members who have approved the dissolution or their authorized representatives.
Review the Form for Accuracy

Before submitting the Certificate of Dissolution, please review it carefully to ensure all information is accurate and complete. Any errors or omissions may cause delays in processing the dissolution or even result in the rejection of the form.

Mail or Deliver the Form to the Connecticut Secretary of State

After completing the Certificate of Dissolution, you can mail or hand-deliver it to the Connecticut Secretary of State’s office. The address is:

  • Business Service Division, Connecticut Secretary of the State, P.O. Box 150470, Hartford, CT 06115

Please note that a filing fee may be associated with submitting the Certificate of Dissolution. Check the Secretary of State’s website for the current fee schedule and acceptable payment methods.

Once the Certificate of Dissolution is filed and approved, your Connecticut LLC will be officially dissolved, and you will receive a confirmation document from the Secretary of State. This document is proof of the LLC’s dissolution and should be kept with your business records.

Is it time to dissolve your business? Trust LegalZoom to make the process effortless, ensuring a smooth and hassle-free experience. Their experts will assist you with filing a Certificate of Dissolution, so you can focus on what’s next.

Recommended: We recommend hiring an expert in business dissolution to take the first step into the next phase of your entrepreneurial journey with peace of mind. We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online LLC Setup

Step 4: Notify Interested Parties

Once your LLC has been officially dissolved, it is essential to notify all interested parties of the dissolution. This includes creditors, vendors, and customers. Informing these parties will help ensure that all outstanding debts and obligations are settled and any future liabilities are avoided.

Notify Creditors, Vendors, and Customers

After your LLC has been officially dissolved, informing all interested parties of the dissolution is important to ensure a smooth winding-up process. These parties may include:

  1. Creditors: Notify all creditors of the dissolution to settle any outstanding debts or obligations. This may involve paying off loans, lines of credit, or other liabilities.
  2. Vendors: Inform your vendors about the dissolution so they can cease providing goods or services and close any open accounts.
  3. Customers: Notify your customers about the dissolution to address any outstanding orders, contracts, or warranties. Depending on your business, this may involve refunding, fulfilling outstanding orders, or transferring contracts to another provider.
Settle any Legal Matters

If your LLC is involved in any ongoing legal disputes or matters, it is crucial to resolve these issues before the dissolution is complete. Consult with an attorney to address any pending litigation or legal obligations.

Distribute Remaining Assets to Members

After all outstanding debts, obligations, and legal matters have been addressed, the remaining assets of the LLC should be distributed among the members. The distribution process should follow the provisions outlined in the operating agreement, which may specify the following:

  • Distribution percentages: The operating agreement may outline the percentage of remaining assets each member is entitled to receive based on their ownership interest.
  • Order of distribution: The operating agreement may provide a specific order in which assets are to be distributed, such as cash first, followed by tangible property, and then intangible assets.
  • Valuation of assets: In some cases, the operating agreement may require assets to be appraised or valued before distribution to ensure fair and equitable dispersal among the members.

You can bring your Connecticut LLC to an orderly and legally compliant conclusion by properly notifying all interested parties and wrapping up remaining business affairs. This will help protect you and the other members from any potential legal and financial liabilities arising after the dissolution.

Filing Fee to Dissolve Connecticut LLC

It is impossible to predict the exact filing fee to dissolve or cancel your Connecticut LLC in 2023, as fees are subject to change. However, as of  2021, no fee is associated with submitting the Certificate of Dissolution or the Certificate of Cancellation to the Connecticut Secretary of State.

To file a Certificate of Dissolution, you must:

  1. Complete the form with the required information, including the LLC name, file number, and dissolution date.
  2. Obtain signatures from the approving members or their authorized representatives.
  3. Mail or hand-deliver the form to the Connecticut Secretary of State’s office.

To file a Certificate of Cancellation, you must:

  1. Complete the form with the required information, such as the LLC name, file number, and the reason for cancellation.
  2. Obtain signatures from the approving members or their authorized representatives.
  3. Mail or hand-deliver the form to the Connecticut Secretary of State’s office.

Please note that fees may change over time. Confirming the current fee schedule on the Connecticut Secretary of State’s website or by contacting their office directly before filing any documents in 2023 is always recommended.

Feeling overwhelmed by the prospect of dissolving your business? Let LegalZoom step in to ease your workload and save you time during this demanding process. Our experts are here to handle each step with professionalism and precision, allowing you to focus on your next move.

Recommended: Choose a reliable business dissolution expert today and experience swift, hassle-free dissolution, taking the weight off your shoulders. Don’t let stress hold you back – rely on their expertize for a smooth and painless business dissolution experience! We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online LLC Setup

FAQs

What is the first step to dissolving a business in Connecticut?
The first step is to file the Dissolution/Withdrawal of Business Entity form with the Connecticut Secretary of State.
Can I withdraw my business from Connecticut without dissolving it?
Yes, you can withdraw your business from Connecticut by filing the Withdrawal of Foreign Business Entity form with the Secretary of State.
How much does it cost to dissolve a business in Connecticut?
The fee for filing the Dissolution/Withdrawal of Business Entity form is $50.
What is the deadline for filing the Dissolution/Withdrawal of Business Entity form in Connecticut?
You must file the form before the due date of your business entity’s annual report.
How long does it take to dissolve a business in Connecticut?
The processing time may vary but generally it can take around two weeks to one month.
Do I need to obtain clearance from the Connecticut Department of Revenue to dissolve my business?
Yes, you will need to obtain clearance from the department before dissolving your business.
What is the Connecticut Department of Revenue Services (DRS)?
The DRS is the state agency responsible for administering tax laws in Connecticut.
How do I obtain clearance from the Connecticut DRS to dissolve my business?
You can obtain a Clearance Certificate by filing form CERT-119 with the DRS.
Is there a fee to obtain a Clearance Certificate from the Connecticut DRS?
No, there is no fee for obtaining a Clearance Certificate from the DRS.
How long does it take to receive a Clearance Certificate from the DRS?
It generally takes about 2-3 weeks to receive a Clearance Certificate.
Do I need to cancel my Connecticut state tax registrations before dissolving my business?
Yes, you will need to cancel your state tax registrations by filing the Connecticut Tax Registration Login User Name Cancellation of Registration form with the DRS.
What happens to my Connecticut state tax accounts after I cancel them?
Once you cancel your state tax accounts, your business will no longer be required to pay any state taxes in Connecticut.
Do I need to file final state tax returns for Connecticut?
Yes, you will need to file final state tax returns for all tax types your business was registered for in Connecticut.
Can I dissolve my business online in Connecticut?
Yes, you can dissolve your business online by using the DOCEDGE system of Connecticut.
How do I use the DOCEDGE system to dissolve my business in Connecticut?
You need to log-in to DOCEDGE and select the option to dissolve your business. Enter the required details and submit the application.
What are the requirements to file the Dissolution/Withdrawal of Business Entity form in Connecticut?
You must have all tax issues resolved, clearance from the DRS obtained and the state filings up-to-date.
Can I dissolve my business in Connecticut if it has outstanding liabilities or debts?
No, you must pay off the outstanding liabilities or debts before dissolving your business.
What are some common liabilities that businesses have to pay off before dissolving in Connecticut?
Some potential liabilities could include employee wages, unpaid taxes, and legal judgments.
Do I need to inform my creditors and suppliers before dissolving my business in Connecticut?
Yes, you must notify all creditors and suppliers in writing before dissolving your business.
How do I notify my creditors and suppliers about dissolving my business in Connecticut?
Send all you notices via registered or certified mail, or by publishing a notice in a newspaper.
What happens to my business’s assets after I dissolve it in Connecticut?
Your business’s assets must be sold, distributed as per the detailed plan you filed with the state at the time of handling the dissolution.
Can I restart my dissolved business in Connecticut?
Yes, you can restart the same business in Connecticut.
How long after dissolution must I wait to restart my business in Connecticut?
There is no waiting period to restart your business after dissolution in Connecticut.
Do I need to reinstate my business if I later change my mind about dissolving it in Connecticut?
Yes, you can reinstate your business at any state of your business functions. You will need to file a Reinstatement Application or Non-Filing of Annual Report Certification.
What is the difference between a Reinstatement Application and a Non-Filing of Annual Report Certification in Connecticut?
A Reinstatement Application is filed by the business entity for reinstating themselves whereas Non-Filing of Annual Report Certification is filed when CT Secretary of State/Administrators of company suspends your company/account.
Is it a requirement by state law to file Articles of Revocation document while dissolving company?
No, Articles of Revocation is not needed in Connecticut but submitting the Dissolution Application is a required part.
Can I get a refund after filing the Dissolution/Withdrawal of Business Entity form in Connecticut?
The filing fee is mandatory and once provided it’s impossible to get a full or partial refund under any circumstances.
Do I need to inform the Connecticut Secretary of State’s office if there is a change of trustee/change of name/change of services for my Reinstated Business?
Yes, change details along with incorporation/in-corporation reports submitted.
What is the first step to dissolve a business in Connecticut?
The first step to dissolve a business in Connecticut is to file a Certificate of Dissolution with the Secretary of State.
Where do I file the Certificate of Dissolution in Connecticut?
You can file the Certificate of Dissolution with the Connecticut Secretary of State’s office.
What is the fee to file a Certificate of Dissolution in Connecticut?
The fee to file a Certificate of Dissolution with the Connecticut Secretary of State’s office is $50.
Do I need to notify the Department of Revenue Services (DRS) when dissolving my Connecticut business?
Yes, you are required to file a final tax return and notify the DRS.
How do I file a final tax return for my Connecticut business?
You can file the final tax return for your Connecticut business by using Form CT-1120 or CT-1120SI, Corporation Business Tax Return.
What if I have outstanding taxes owed when dissolving my business in Connecticut?
If you have outstanding taxes owed when dissolving your business in Connecticut, you will need to pay them before filing the Certificate of Dissolution.
Do I need to receive permission from the state or a court to dissolve my business in Connecticut?
No, you do not need permission from the state or a court to dissolve your Connecticut business.
How long does it take for the Certificate of Dissolution to be processed in Connecticut?
It may take several days to several weeks for the Certificate of Dissolution to be processed in Connecticut.
What happens after I file the Certificate of Dissolution in Connecticut?
Once the Certificate of Dissolution is processed in Connecticut, your business will be officially dissolved.
Can I dissolve my Connecticut business online?
Yes, you can complete the Certificate of Dissolution online and submit it electronically through the Connecticut Secretary of State’s website.
What happens to my Connecticut business debts and liabilities when I dissolve my business?
Your Connecticut business debts and liabilities will need to be settled before your business can be officially dissolved.
Can I dissolve my Connecticut business if I have outstanding lawsuits or legal issues?
Yes, you can dissolve your Connecticut business if you have outstanding lawsuits or legal issues, but you may need to settle them before your business can be officially dissolved.
What should I do if I have employees when dissolving my Connecticut business?
If you have employees when dissolving your Connecticut business, you will need to follow the proper federal and state regulations for terminating employment.
How do I terminate the Connecticut business registration for my dissolved business?
Once your Connecticut business is dissolved, the state will terminate the business registration on their end automatically.
Can I temporarily suspend operations of my Connecticut business instead of dissolving it?
Yes, you can temporarily suspend operations of your Connecticut business by filing for a Certificate of Withdrawal with the Connecticut Secretary of State’s office.
Is a Connecticut business required to file annual or periodic reports even while dissolved?
No, a Connecticut business is not required to file annual or periodic reports once it has been dissolved.
Can I sell or transfer my Connecticut business while in dissolution status?
Yes, you can sell or transfer your Connecticut business while it is in dissolution status, but the buyer or recipient must also follow proper dissolution procedures.
Will my Connecticut business name be available for use again after it has been dissolved?
No, once your Connecticut business has been dissolved, its name cannot be used or reserved for another business entity for five years.
Can I reactivate a Connecticut dissolved business if I change my mind?
Yes, you can reactivate a Connecticut dissolved business within five years of the dissolution date by filing Entity Reinstatement with the Connecticut Secretary of State’s office and paying the appropriate fees.
What are the consequences of not properly dissolving my Connecticut business?
Not properly dissolving your Connecticut business can result in penalties, fines, and unwanted legal actions.
Do I need to file the Certificate of Dissolution with any other agencies in Connecticut?
No, you do not need to file the Certificate of Dissolution with any other agencies in Connecticut.
Does Connecticut require any notice be given prior to dissolving a business?
No, Connecticut does not require any prior notice when dissolving a business.
Who needs to sign the Certificate of Dissolution in Connecticut?
The Certificate of Dissolution in Connecticut must be signed by an authorized representative of the business.
Can I dissolve a foreign business in Connecticut?
Yes, you can dissolve a foreign business in Connecticut, but you must follow the proper procedures and requirements for foreign entities.
Is there a specific format for the Certificate of Dissolution in Connecticut?
Yes, there is a specific format for the Certificate of Dissolution in Connecticut that must be followed.
What information is required to be included in the Certificate of Dissolution in Connecticut?
The Certificate of Dissolution in Connecticut requires information such as the name of the business, date of dissolution, and a statement acknowledging that all debts and liabilities have been settled.
Can I dissolve my Connecticut business if I am involved in bankruptcy proceedings?
You can dissolve your Connecticut business if you are involved in bankruptcy proceedings, but you must follow the proper bankruptcy procedures in addition to the dissolution process.
How do I notify Connecticut clients or customers that my business is being dissolved?
You should notify Connecticut clients or customers that your business is being dissolved through mail or email, stating the reason for the dissolution and providing instructions on how to proceed.

Also Read

Conclusion

Dissolving your Connecticut LLC is an important and often emotional decision that signifies the end of a business journey. While it may be challenging, ensuring that all legal requirements and obligations are met is essential to avoid future complications or liabilities. By diligently following the steps outlined in this guide and working closely with the relevant state agencies, you can smoothly navigate the dissolution process while maintaining compliance with Connecticut regulations.

As you close this chapter in your business journey, remember that new opportunities may lie ahead. We invite you to explore LLCBase with your Connecticut LLC dissolution needs. We wish you the best of luck in your future endeavors and hope to assist in any way we can.

Leave a Comment