How to Dissolve an LLC in NC (North Carolina)

  So you’ve decided that it’s time to dissolve your LLC in North Carolina. That’s a big decision, and it’s not one to be taken lightly. A lot of things need to be taken into account before the dissolution of an LLC, so it’s crucial to cover all your bases. When you create an LLC in North Carolina, you are not only establishing a legal entity, but you are also creating a relationship with the state. To dissolve the LLC, the owners must follow the procedures outlined by state law, which governs this formation. With this guide, you’ll be able to dissolve your North Carolina limited liability company with ease. We’ll cover everything from the initial planning stages to the final steps of filing your dissolution paperwork. We’ll also give you some tips on how to streamline the procedure. So whether you’re ready to dissolve your LLC in North Carolina or just want to learn more about the process, this article is for you.

How to Dissolve an LLC in NC (North Carolina)?

Your limited liability company has legal status in North Carolina. Dissolution is a legal procedure that starts the process of formally terminating the LLC in NC. Although an LLC may be dissolved voluntarily by its members rather than by court order, this is the case in this instance. Administrative reasons for the dissolution of a North Carolina LLC include failure to submit annual reports, pay fees, or face penalties. Make sure the resolution to approve the dissolution is recorded in the official minutes of the dissolution meeting or on a written permission form, whether the LLC is dissolved by the regulations in the formational agreements or on the acceptance of all members. Here are the specific steps you need to take to dissolve your LLC in North Carolina.

1. Meet the terms of your North Carolina Limited Liability Company Operating Agreement

An operating agreement is created once an LLC has been established as a legal company. The operating agreement serves as a detailed guide and contains all the details of how the firm will operate and develop. A dissolution procedure is also included in your agreement. The typical steps for dissolving an LLC are as follows:

• The LLC members will first vote to dissolve the company at the dissolution meeting. The process enters formal processes if the majority votes “YES.”
• An official date for the LLC’s dissolution will then be chosen.
• The assets of the North Carolina LLC will then be totaled and distributed to the stakeholders and members by that total.

2. File North Carolina LLC Articles of Dissolution

To dissolve NC LLC, you need to file articles of dissolution with the North Carolina Secretary of State, Corporations Division. The articles of dissolution will include the essential information of your LLC, such as

• Its name
• The dates of the organization’s incorporation and any revisions to its articles of incorporation
• The justification (such as the unanimous written permission of all members) for filing the articles of dissolution; and
• The time when dissolution will take effect.

The processing of your filing typically takes seven to 10 business days. For faster processing, there may be additional costs. From the SOS website, you can download a form for articles of dissolution. Be advised that 120 days following the effective date of dissolution, your business name will be made available for use by others.

3. Finishing

The corporation continues to exist after the vote to dissolve your LLC in order to handle a few last tasks that are collectively referred to as winding up the company. You’ll likely assign one or more LLC managers or members to take care of the winding up. Important winding up duties under the LLC Act of North Carolina include:

• obtaining LLC property
• releasing or making plans to release LLC liabilities; selling LLC property that won’t be delivered in kind to members; 
• and distributing any leftover assets to LLC members.
• You are needed to make payments in a specific order for the last two things on the list, discharging liabilities and distributing payouts to members.

You have to start by paying all of your creditors, including any members of the LLC who are also creditors. You must be sure to pay any unpaid taxes right away. Subsequently, payments to current and former LLC members should be made, for instance, upon a member’s exit from the firm or upon the prior consent of company management, unless otherwise specified in the formation papers. If any assets are still available, you should divide them among the members following your operating agreement or articles of incorporation, or else proportionately based on each member’s contributions to the business after adjustments.

4. Reminder to Lenders and All Other Prospective Claimants

It is common practice to notify lenders and other claimants of the dissolution of your LLC as part of the winding-up procedure. It is not required that you give notice, but doing so will assist you to reduce your liabilities and make final disbursements to members safer. Under North Carolina law, after the dissolution’s effective date, notice should be given by sending a written document to known claimants. Suitable written notice must:

• Describe the details that a claim has.
• Give a postal address where claims can be mailed
• Specify the period by which the claim must be received by the dissolved limited liability company, which cannot be less than 120 days from the date of the written notice; and
• Specifying that if the claim is not received by the date, it will be barred.

You may also inform potential claimants by putting up a notice in a newspaper. There are precise guidelines for delivering notice by publishing, just as there are for sending direct notice to specific claimants. In general, claimants have five years from the publication date of the newspaper to file a claim. Directly notifying individual claimants in writing may have certain benefits. In any case, you should carefully consider seeking help from a business professional if you decide to notify claims of your LLC’s dissolution.  

5. Tax Clearance

You are not required to acquire tax clearance in North Carolina before dissolving your LLC. It’s crucial that you clear any outstanding taxes. Be careful to check the “final return” box on your IRS Form 1065 before submitting your final federal tax return. 

6. Submit your final tax return and Form 996 to the IRS

In North Carolina, dissolving an LLC is not a process that requires prior IRS approval. However, to let the IRS know that this is your last tax return, you must select the box next to “final return” on Form 1065. After the LLC has been dissolved, you might additionally need to submit Form 966 to the IRS. If your dissolved LLC is needed to submit this form, you must do so no later than 30 days after the final dissolution plan’s approval. This document just notifies the IRS of the LLC’s dissolution so that appropriate follow-up action can be conducted.

7. Cancel all business permits and licenses issued locally

Any company licenses and permissions must be canceled to formally dissolve your North Carolina LLC. You must get in touch with the neighborhood office where you submitted your application if your local license or permit is not handled by a North Carolina state agency.

8. Distribute any remaining funds to the LLC Members

The remaining assets are those that remain after all business debts, fees, and other responsibilities have been fully fulfilled. If any LLC assets remain, they will be distributed among the members based on their respective ownership stakes.

9. Let the staff and clients know

Maintaining cordial business ties is crucial during a North Carolina LLC dissolution. This is important if you plan to remain employed in the same field even after the LLC has been dissolved. It’s imperative to share the news of the dissolution in a timely and dignified manner with both staff and customers. Difficulties arise while attempting to dissolve an LLC in North Carolina. However, you should make sure that your LLC is closed properly by carefully adhering to the aforementioned measures.

10. Foreign LLC Registrations

Is your LLC authorized to conduct business in other states? Is it registered? If so, you must submit additional applications to cancel your business license in those states.  In some states, a certificate of dissolution is also known as a termination of registration, certificate of termination of existence, or application of withdrawal. You will still be responsible for annual report costs and minimal North Carolina business taxes if the supplementary termination paperwork is not submitted.

11. Get Expert Assistance to Handle the Legal Tasks

Getting expert assistance is essential when dissolving a limited liability company in NC. Dissolving a North Carolina LLC requires a lot of effort and documentation. The team at Goodbye Startup is here to help if you’re presently experiencing difficulty and don’t have anybody for assistance.  The professionals at Goodbye Startup help entrepreneurs dissolve their companies in a manner that keeps them out of legal and financial issues. With the help of Goodbye Startup, you can create a personalized NC LLC dissolution plan that will serve as a roadmap while you dissolve your limited liability company in North Carolina. Your tax accounts will be easily closed and the Article of Dissolution will also be filed with the assistance of experts at Goodbye Startup.  To Schedule a Free Consultation Call With Goodbye Startup, Click Here.

Conclusion

Limited liability Companies limit the personal liabilities of the owners. An LLC is a very economical choice. But if closing the company is necessary, the dissolution procedure must be carried out legally.  To avoid legal complications, it’s best to hire a professional to complete all the work of dissolving your LLC in NC. You can save your time, money, and energy by availing of the services of experts at Goodbye Startup.