Dissolving a Business in New York 2024: A Step-by-Step Guide

Closing an LLC in New York 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 New York. 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 New York business landscape.

Dissolve a Business

On this page, you’ll learn about the following:

What is a Business Dissolution
Dissolve Your Business in New York: 4-Step Guide
Filing Fee to Dissolve New York LLC
FAQs

What is a Business Dissolution

New York LLC Dissolution refers to the process of legally ending the existence of a Limited Liability Company (LLC) registered in the state of New York. 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 New York 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 Empire State is essential to avoid potential legal and financial liabilities for the members involved.

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Dissolve Your Business in New York: 4-Step Guide

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

Step 1: Follow Your New York 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.

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Consult Your Operating Agreement

The LLC operating agreement is a crucial document governing your New York 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 New York 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 New York 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 New York 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 New York LLC, you must ensure that all outstanding debts and taxes are settled.

Settle Outstanding Debts and Taxes

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

New York Secretary of State: Ensure you have paid any outstanding franchise taxes and fees, including the annual New York 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 New York State 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 New York State Department of Taxation and Finance

After settling all outstanding debts and taxes, you must file your final tax returns with the New York State Department of Taxation and Finance. This process involves:

Filing a Final Form ST-121:1/11: Complete and submit the Limited Liability Company Return of Income (Form ST-121:1/11) 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 Form ST-121:1/11, ensure that you pay any remaining balances due to the New York State Department of Taxation and Finance, including any late fees or penalties that may apply.
Closing Tax Accounts: Inform the New York State Department of Taxation and Finance 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 New York LLC by filing a Certificate of Dissolution with the New York Secretary of State.

Complete the Certificate of Dissolution

To officially dissolve your New York LLC, you must complete and file the Certificate of Dissolution with the New York 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 Articles of Organization.
Secretary of State File Number: Include the LLC’s file number assigned by the New York 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 New York Secretary of State

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

Department of State Division of Corporations, State Records and Uniform Commercial Code, One Commerce Plaza, 99 Washington Ave., Albany, NY 12231

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 New York 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.

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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:

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.
Vendors: Inform your vendors about the dissolution so they can cease providing goods or services and close any open accounts.
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 New York 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 New York LLC

It is impossible to predict the exact filing fee to dissolve or cancel your New York 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 New York Secretary of State.

To file a Certificate of Dissolution, you must:

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

To file a Certificate of Cancellation, you must:

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

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

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FAQs

What is the first step to dissolve a business in New York?

The first step is to hold a meeting with the owners and obtain authorization to dissolve the business.

Is a Business Certificate of Dissolution necessary to dissolve a business in New York?

Yes, a Business Certificate of Dissolution must be filed with the New York Department of State.

Who is responsible for filing the Business Certificate of Dissolution in New York?

The business owners or authorized representative is responsible for filing the certificate.

Is there a fee to file a Business Certificate of Dissolution in New York?

Yes, a fee of $60 must be paid to file a Business Certificate of Dissolution in New York.

Is it possible to dissolve a business in New York without filing a Business Certificate of Dissolution?

No, it is not possible to dissolve a business in New York without filing a Business Certificate of Dissolution.

Do all members of the business need to sign the Business Certificate of Dissolution in New York?

Yes, all members or authorized representatives of the business need to sign the Business Certificate of Dissolution in New York.

How long does it take to receive confirmation of the dissolution of a business in New York?

Confirmation of the dissolution of a business in New York can take approximately 2-3 weeks.

What happens after the Business Certificate of Dissolution is filed in New York?

The Department of State issues a Certificate of Dissolution, which indicates that the business is no longer authorized to operate.

Is there a deadline to file a Business Certificate of Dissolution in New York?

There is no deadline to file a Business Certificate of Dissolution in New York, but it should be filed as soon as possible.

Can a business be dissolved in New York if it owes taxes or fees to the state?

No, a business cannot be dissolved in New York if it owes taxes or fees to the state.

Can a dissolved business in New York be reinstated?

Yes, a dissolved business in New York can be reinstated if it was dissolved within the last 6 years.

Is it necessary to cancel licenses, permits, and registrations when dissolving a business in New York?

Yes, all licenses, permits, and registrations for the business must be cancelled when dissolving a business in New York.

Are there any tax obligations after dissolving a business in New York?

Yes, there may be tax obligations after dissolving a business in New York, including final tax returns and payment of any outstanding taxes.

What should I do if I receive a lawsuit or claim against my dissolved business in New York?

You should contact an attorney to discuss your options and next steps.

Do I need to notify creditors when dissolving a business in New York?

Yes, it is recommended to notify creditors when dissolving a business in New York, to avoid issues in the future.

Can a New York business be dissolved if it is in bankruptcy proceedings?

No, a New York business cannot be dissolved if it is in bankruptcy proceedings.

Do all businesses in New York need to go through the same dissolution process?

No, the dissolution process may vary depending on the type of business and its legal structure.

Can dissolve a foreign business in New York?

Yes, a foreign business can be dissolved in New York if it qualified to do business in the state.

What are the consequences of not dissolving a business in New York?

Ongoing fees, penalties, and legal issues can arise if a business is not properly dissolved in New York.

Is there a statute of limitations on claims against a dissolved business in New York?

Yes, there is a statute of limitations of six years on claims against a dissolved business in New York.

Do I need to notify the New York State Workers’ Compensation Board when dissolving my business?

Yes, you need to inform the New York State Workers’ Compensation Board when dissolving your business.

Is there a fee to notify the New York State Workers’ Compensation Board of a business dissolution?

No, there is no fee to notify the New York State Workers’ Compensation Board of a business dissolution.

Can I dissolve a business in New York if it has outstanding loans or debts?

Yes, you can dissolve a business in New York if it has outstanding loans or debts, but the debts must be paid or settled before dissolution.

Do I need to notify customers or clients when dissolving a business in New York?

It is not required to notify customers or clients when dissolving a business in New York, but it may be a good idea to inform them.

Is there a cost to formalizing the dissolution of a marriage by County Clerk office in NY?

Yes, there is a filing fee of $3.00 that must be paid at the County Clerk office in NY to formalize the dissolution of a marriage.

What is legal representation service?

Legal representation service is a service provided by a lawyer or law firm to represent a person or business in legal matters.

Can a lawyer assist with dissolving a business in New York?

Yes, a lawyer can assist with dissolving a business in New York.

Is it possible to dissolve a business in New York if the business is currently in the middle of a lawsuit?

Yes, it is possible to dissolve a business in New York if the business is currently in the middle of a lawsuit. However, there may be additional legal considerations and it may be necessary to seek legal counsel.

What is the first step in dissolving a business in New York?

The first step in dissolving a business in New York is to file a certificate of dissolution with the New York Department of State.

Where can I find the certificate of dissolution form?

The certificate of dissolution form can be downloaded from the New York Department of State website.

How much does it cost to file a certificate of dissolution in New York?

The filing fee for a certificate of dissolution in New York is $60.

Is there a specific deadline for filing a certificate of dissolution in New York?

No, there is no specific deadline for filing a certificate of dissolution in New York.

Do I need to file any other paperwork besides the certificate of dissolution?

It may be necessary to file other paperwork depending on the type of business entity being dissolved.

What is a Publication of Notice and why is it required during business dissolution?

A Publication of Notice is a legal document that must be published in a newspaper distributed in the county where the business is located, and it is required by the New York State Limited Liability Company Law.

What are the costs involved in publishing the notice?

The cost of publishing the notice varies based on the newspaper and the county.

Is publication of notice required for all types of businesses in New York?

No, publication of notice is required only for certain types of businesses such as Limited Liability Companies.

How long do I have to wait after publishing the notice before filing the dissolution certificate?

After the publication is complete, you must wait at least six weeks before filing the dissolution certificate.

Is it possible to expedite the process of dissolving a business in New York?

Yes, the process can be expedited by paying a higher fee and submitting a request for expedited processing.

Can I dissolve my New York business online?

Yes, you can dissolve a business online through the NY Department of State’s online portal.

What documents do I need to prepare before I begin the dissolution process?

You will need to review its organizational documents, such as the certificate of incorporation or articles of organization, and internal agreements.

What if I don’t have copies of the organizational documents?

You can request copies from the Department of State’s Division of Corporations.

How do I notify the New York State tax department that I am dissolving my business?

You must file a final New York State tax return and check the box indicating that it is a final return.

What if I have unpaid state taxes when I file for dissolution?

Any unpaid state taxes or fees you owe must be paid before dissolution.

Do I have to notify the federal government when I dissolve my New York business?

Yes, you must notify the IRS that your business has been dissolved and permanently closed.

Do I need to also notify all of my clients and customers of the business dissolution?

It is not legally required to notify clients or customers, but it is recommended to avoid misunderstandings or conflicts.

Are there any penalties for failing to dissolve a business in New York when it is no longer operating?

Failing to dissolve a business can result in penalties, liabilities, and fees continuing to accrue even if the business has closed.

Can a business owner walk away from a business without properly dissolving it?

No, walking away from a business without dissolving it can lead to personal liability and financial penalties.

Can I dissolve only part of my New York business?

Yes, depending on the entity type, you may be able to dissolve one or more of the business’s subdivisions or units.

Can I dissolve a New York business that has unpaid debts?

Yes, but you must address any outstanding debts or obligations before dissolving the business.

What if I want to reopen the business later after dissolving it?

You will need to file an application to dissolve the registration and then as an additional step, form a new business entity.

Can I recover taxes or filing fees I have already paid if I dissolve my business?

No, there is no provision to recover any fees or taxes already paid to registered the business.

If I want to dissolve both state and federal-entity status, do I need to file separately?

Yes, the No separate process is needed. Federal-directed tax returns and in general, closing down an LLC with their home states and with the IRS is separate.

What form will I use if I dissolve a C corporation?

If you dissolve a C corporation in New York, file Form CT-12E with your final Franchise Tax Return.

Can I dissolve my New York non-profit corporation registered with the New York State Attorney General office?

Yes, you must email, fax, or also mail your request to confirm your implementation request.

How do I obtain the certificate of good standing required at the dissolution process?

New York’s certificate of good standing can be downloaded requests through Department of State’s Division of Corporations website.

Can I still dissolve a New York Business without going through some of the formalities, i.e., publication of notice requirement for Certificate of Dissolution?

With exception of certain kinds of LLCs, it is requisite that all companies announce complaisance verification.

Conclusion

Dissolving your New York 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 New York 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 New York LLC dissolution needs. We wish you the best of luck in your future endeavors and hope to assist in any way we can.