The steps
- Approve it. Follow the vote your operating agreement sets for dissolving. Record the decision in writing and keep it with the LLC records.
- File with the state. Submit the dissolution or cancellation document to the state where the LLC was formed (below).
- Wind up. Collect what is owed to the LLC, pay or settle its debts, and tell creditors. Some states let you give formal notice to creditors to cut off later claims.
- Distribute what is left to the members, in the shares the operating agreement sets.
- File final tax returns, federal and state, and close payroll and sales tax accounts.
- Close the rest: the business bank account, licenses and permits, the registered agent service, and any foreign registrations in other states.
The state filing
Every state has a filing that ends an LLC. Its name varies: Delaware uses a Certificate of Cancellation, Texas a Certificate of Termination, and California a Certificate of Dissolution followed by a Certificate of Cancellation. Many states call it Articles of Dissolution.
Some states will not accept it until the LLC's state taxes are settled, and ask for a tax clearance or a final return first. Check your state's business filing office before you file; it is the same office you formed the LLC with.
Final tax returns
- Single-member LLC taxed as a sole proprietorship: report the final year on your own return.
- Multi-member LLC taxed as a partnership: file a final Form 1065 and check the "final return" box, with final K-1s for each member.
- LLC taxed as an S or C corporation: file the final 1120-S or 1120.
- Employees: file the final payroll returns and W-2s.
Then write to the IRS to close the LLC's business account. The EIN is never reissued to anyone else.
If you just stop
An LLC that stops trading but is not dissolved stays on the state record. Reports and any state tax stay due, penalties build, and the state eventually dissolves it administratively. That is not a clean close: tax returns may still be owed, and some states hold members responsible for unpaid state taxes.
By state
Each state page names the office and links to its official guidance.
Related: adding or removing a member, moving an LLC to another state, changing your registered agent.
Frequently asked questions
How do I dissolve an LLC?
Get the members to approve it as your operating agreement requires, file the dissolution or cancellation document with the state where the LLC was formed, file final federal and state tax returns, pay or settle debts, distribute what is left to the members, and close the bank account and any licenses.
What if I just stop using my LLC?
It stays on the state record and keeps its obligations: yearly reports, any state tax, and a registered agent. When those go unfiled the state adds penalties and eventually dissolves it administratively, which is not the same as closing it cleanly, and tax returns may still be owed.
Do I need to cancel my EIN?
An EIN is never reused or cancelled, but the IRS will close the business account. File the final return, then write to the IRS with the LLC name, EIN and the reason for closing.
What is the difference between dissolution and cancellation?
Dissolution is the decision to wind up the business. Cancellation or termination is the state filing that ends the LLC’s existence once it is wound up. Some states use one filing for both, some use two.
Do I have to dissolve in every state the LLC registered in?
Yes. If the LLC registered as a foreign LLC in other states, withdraw from each one as well, or those states keep expecting reports and taxes.
Can a dissolved LLC be reinstated?
An LLC dissolved by the state for missing reports can usually be reinstated by filing what was missed. A voluntary cancellation is generally final; you would form a new LLC.
