Struggling Business? We Help You Dissolve Your Texas LLC

If you want to dissolve Texas LLC, you’ll discover that it’s not an easy task. There are several things that you need to take into consideration. In this article, we’ll walk you through the process of dissolving an LLC in Texas, step-by-step.

How to Dissolve an LLC in Texas?

Sometimes our business ventures do not go as planned, and it comes time to cease doing business altogether. If you are in this situation and your current business structure is an LLC, it probably means that you are wondering how to dissolve Texas LLC. Many businesses in Texas are LLCs since this is one of the least complicated business structures to form. When you form an LLC, you can have several “members,” or owners, without any limit on the total number of owners in the business. You may need to close your LLC for several different reasons. If you are thinking about ceasing business operations, you likely have many questions about how to dissolve an LLC in Texas. In this guide, we have answered your questions and shared the step-by-step process to dissolve LLC in Texas.

What is the Procedure for Dissolving a Limited Liability Company? 

There are many steps that go into dissolving a Texas LLC. Some of these steps include: 1. Notifying the Secretary of State of your intent to dissolve 2. Dissolution and winding up 3. Dissolving your company’s name 4. Paying fees 5. Paying taxes 6. Drawing up an agreement for the LLC’s members 7. Dissolving the LLC’s assets The best way to dissolve Texas LLC is to work with the experts of GoodBye Startup who can take care of all the details for you. When working with GoodBye Startup, you can rest assured that everything will go smoothly, and you can focus on the more important things in life. Here is the Step By Step Process of Dissolving Texas LLC

1. Wrapping up the Business Operations

First, you need to wind down the business. That means you should stop using the company’s name and stop paying its bills. In some cases, it might be enough to simply close the business’s bank account.  But if the company has outstanding liabilities, you’ll need to settle those debts as well. You’ll also need to terminate the company’s active membership. You can do this by following the process outlined in the BOC. The BOC (Texas Business Organizations Code) states that you can terminate a company’s membership through an agent, such as a trustee. If you’re not able to terminate the company’s membership, you can do so by following the procedures outlined in the BOC.

2. Tax Returns

After taking action to wind up your LLC, you may need to decide whether to report the winding up on your income tax returns. As a general matter, winding up an LLC is not reportable as a taxable event. This is true even if the company is no longer eligible for limited liability. This does not mean, however, that the LLC’s assets cannot be taxable. In particular, you should seek advice from an experienced tax professional regarding the taxability of the LLC’s property. Your tax professional can advise you whether the LLC’s property should become taxable in the winding-up process, as well as whether any residual assets should be distributed to the LLC members. If you do not dissolve Texas LLC as required by law, you might face fines and legal trouble. LLCs in Texas are also required to submit an annual franchise tax report.

3. Inform Claimants and Stakeholders

Before members of a dissolving LLC take any final steps to dissolve the business, they need to notify creditors and claimants of their intent. Most creditors and claimants will want to be notified of the dissolution to make payments for things such as loans, leases, etc. This step is also required by texas law, and it’s also a good idea to notify clients and customers of the dissolution. If the LLC has a website, customers and clients can be notified about the dissolution via email and social media.

4. Request an Account Status Certificate

Once the active business operations have concluded, you’ll need to request a Certificate of Account Status (CAS) from the Secretary of State. The CAS is essentially a receipt that proves your LLC is no longer active. This document will be sent to you via email and can also be faxed to the Secretary of State if you want. If the LLC has any Tax Code duties, the Comptroller of the State of Texas will figure them out. The Texas Comptroller of Public Accounts must provide an LLC with a Certificate of Account Status as proof that the LLC paid taxes, is in good standing, and is permitted to voluntarily dissolve.  A voluntary dissolution occurs when the LLC members agree to dissolve the company. A limited liability company (LLC) may voluntarily dissolve itself in accordance with the terms of its operating agreement.

5. Filing Paperwork

Next, you’ll need to file a series of forms with the Secretary of State. The Secretary of State will send you a letter stating that you are no longer active. This letter will include instructions on how to complete the dissolution process.

6. Certificate of Termination

Once you file a certificate of account status, you’ll need to go one step further and file a Certificate of Termination. This certificate confirms that your business has paid all remaining state and local taxes. It also notifies any local taxing bodies of the dissolution. As with the business accounts, you’ll need to file this certificate online. If you’re a person or business that has operated under a federal tax ID, you also need to file a Certificate of Termination with the IRS. To get a Certificate of Termination, you’ll need to fill out Form 1065. Then, you will need to submit it via mail, fax, or online. The IRS will also require that you file your Form 1065 within 60 days of the date of dissolution. This certificate is necessary to ensure that your business’s tax payments have been taken care of in a timely manner. The processing period for termination certificates varies, however in most situations it is 3-5 days. The Texas Comptroller Office is where all of the heavy work is executed.

7. Decide to Sell and Divided Up Company Property

After paying debts and satisfying claims, LLC members need to sell and distribute the business’s assets. This means they need to sell all the assets they own to the highest bidders. This might include selling real property, paying off business debts, or paying off any outstanding investor loans. Conduct distribution according to members’ respective rights and interests. The LLC operating agreement outlines this information. Basically, LLC members need to sell all the assets they own and distribute those profits to members. This is the last major step in the dissolution process.

8. Address Unresolved Issues

LLC Dissolution is not the end of the legal and financial problems a business has. Members of an LLC need to look into any outstanding legal or financial obligations they have. For example, if they are a party to a lawsuit, they can file for bankruptcy to deal with that matter before shutting down the LLC. A business owner may want to end things to pursue new opportunities or avoid legal and financial woes. Whatever the reason, owners of Limited Liability Companies need to follow certain protocols before they can officially and properly dissolve their LLCs.

Here’s How GoodBye Startup Can Make It Easier For You to Dissolve Your Texas LLC

The process of dissolving an LLC is a complicated one and requires a lot of paperwork and legwork. If you don’t have someone who can help you through this process, you can contact GoodBye Startup.  Goodbye Startup is a team of experts and is dedicated to helping business owners dissolve LLCs. With GoodBye Startup, you can create a customized dissolution plan that will help you through the entire LLC dissolution process. Click here to know what business owners say about GoodBye Startup.

Final Thoughts

Dissolving an LLC is a complicated process, and GoodBye Startup aims to streamline the process. By submitting an online application, the company’s specialists can get your application approved in one day.  When you file your notice of termination with the Secretary of State, GoodBye Startup will handle the rest. And, if any complications arise, the company is available to help you through the process. There are many other companies that offer similar services, but most charge more than GoodBye Startup. And while they may be able to guide you through the dissolution process, they can’t take the place of legal advice. If you want to dissolve Texas LLC, feel free to contact us.