Starting an Arkansas LLC is one of the best decisions that a person can probably make if he wants to start his business. Still, some situations in which either the person cannot handle his business or wants to shut it down. In such conditions, the business entity has to dissolve its LLC officially. Now to dissolve the LLC, one needs to go through three essential steps, much fewer than the steps of going through how to start an LLC.
A compliant dissolution involves following the operating agreement created upon formation of the LLC, closing tax accounts, and filing the articles for dissolution. But before this, most people wonder why do they need to dissolve their LLC. If you also have any such questions and want to know in detail the process of dissolving your firm, you should read the following.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in Arkansas
- Other Things to Note When Dissolving Your LLC
- Why Dissolve Arkansas LLC?
- Arkansas LLC Dissolution Review
How to Dissolve an LLC in Arkansas
There comes a time when a business has to cease operation for some reason. As such, it is necessary to do the closure property by filling a dissolution with the states. Here are the steps:
Step 1: Use Arkansas LLC Operating Agreement As Guide
When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. But there is also a dissolution process, which is added to your agreement by the best LLC service you must have chosen. The common steps that almost every LLC follows are:-
First of all, there will be voting among the LLC members for dissolving in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.
- All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
- After that, a formal date of dissolving the LLC will be decided.
- The next step is counting of the asset that is available in LLC and dividing it among the stakeholders and members accordingly.
- After that, the creditors of the business are notified, and the debts of the business are settled.
This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminate an LLC. Following are the top 5 best LLC service providers in the USA. All of these below-mentioned services not only help you to form your LLC but also will guide you through to dissolve it.
Step 2: Close Tax Accounts
Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.
Then, you must contact all government entities and clear the amount of tax due until the date you have decided for dissolution. All the taxes must be paid in advance so that you don’t face any issues in the further process of shutting down your LLC.
Some of the common taxes that limited liability companies have to pay are:
- unemployment insurance tax
- employee withholding tax if the LLC has or had employees in their LLC
- if LLC uses to sell taxable goods then they are also liable to pay the sales and use tax
Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close accounts. That is why the LLC owner should go through the sales tax guide and hire an accounting service. If you want to do the accounting yourself or make accounting easy, try FreshBooks or QuickBooks.
Step 3: File Articles of Dissolution
There is a list of voluntary forms that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. The process of filing the articles is very easy and is discussed below.
- First of all, the person has to jump into the Secretary of State Website of Arkansas state.
- In that particular SOS website, the LLC owner has to look for the Domestic LLC Articles of Dissolution page.
- There is a form available on this page, which is basically the article of dissolution you are looking for. You have to download that pdf form and start filling it.
- You must fill in all the important and legal information in the form, so you should be extra careful.
- After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution fees.
- After filling in every detail, one should submit the form through email and make a payment.
The LLC you owned is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call that he accepts your expedited dissolutions or not.
Other Things to Note When Dissolving Your LLC
After the dissolution processes, there are some other chores that the owners of LLC need to take care of. These are as important as the process of actual dissolution. Otherwise, the name and fame earned by LLC may be ruined within seconds. These processes include tasks related to the monetary division of assets and clearing every record both legally and monetarily.
There are some purposes of LLC that require some attention even after dissolution, known as winding up. The task of winding up includes.
- For a period of time, the property of business requires preservation.
- If there is any civil case against the LLC, then one needs to prosecute them.
- Winding up includes settling all the disputes of LLC.
- Transferring of all the property of LLC to the names of partners.
- Discharging of all the liabilities that the LLC owes to others.
- Proper distribution of all the assets into members according to their percentage of partnerships.
If you are dissolving your LLC in Arkansas, you are not required to obtain any tax clearance. Your task of dissolution will complete even without your tax clearances. But if you are filing the federal taxes, you should go through the final return box in your IRS form.
The IRS form for the LLC that are classified as partnerships is 1065, and those LLC’s who have registered themselves as corporate should check IRS form number 1120.
Cost of Dissolving LLC
If you want to dissolve the LLC registered with Arkansas, then there is a fixed cost that you have to bear. The fees charged by the government are $150, the details which are mentioned on the second page of the articles dissolution filing form. You are given plenty of choices to make this payment.
- You can select a payment pick-up option.
- There is an option of direct account transfer through your prepaid accounts.
- LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction state will make.
Why Dissolve Arkansas LLC?
People often think that if they want to shut down an LLC in Arizona, they can close the gates. No, that is not an adequate practice. Want to know why? Read the following points.
- If someone is not closing or dissolving the company properly, they can get into any legal issues.
- It is the same as an outstanding bill; if someone is holding a business, they are entitled to pay taxes. So if someone doesn’t dissolve their company properly, they will have to pay the taxes.
- It can lead to other problems like lawsuits against the owners of the operations that are not legal.
- The assets can lose value by the time owners realize that it is crucial to dissolve the company.
Top businesses in Arkansas!
To have a company that gives out the best cash inflow, we have to ensure the economic aspects. The research about this will ensure that there will be no need to dissolve an LLC in Arkansas. Some sectors make the most contribution to the GDP of Arkansas. Those industries are the ones that provide us with the top businesses. Want to know the main sectors? Check here!
- Finance: People need to get as much help as that they can get in finance. The industry gave $17 billion, which is a pretty big amount for its contribution.
- Healthcare: No one needs to be without the services of health care. The sector is not only good for the people, but it is good for the economy. The summed up amount of the output was $11.18 billion, which stands high compared to all sectors.
- Agriculture: When it comes to this sector, it generates around $9 billion of cash receipts for the state. It can lead to a lot better economy of the state, and if someone starts an LLC in Arkansas, they can make good money out of it.
Transportation and warehousing: It is not like any state doesn’t need the services of transports or warehouses. With the help of this sector, the state made a whole $4.5 billion on its own.
Arkansas LLC Dissolution Review
Time needed: 30 minutes.
Here’s a recap of the steps you must follow when dissolving your Arkansas LLC. Click on the steps in this list if you want to read the full detail.
- Use Arkansas LLC Operating Agreement As Guide
Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
- Close Tax Accounts
Make sure you close all your tax accounts to avoid incurring further costs.
- File Articles of Dissolution
File the article of dissolution to make it known your the state where your LLC operates that you are indeed no longer in business.
Yes, there a fee of $150, which Arkansas SOS charges to dissolve the legally registered LLC and proceed with the task of removal of their name from every tax list and benefits.
No, there is no requirement of revenue department clearance till the time the SOS of Arkansas accepts the dissolution form.
The name will also get deregistered with the dissolution of the LLC. But the name will not be allotted for the next 120 days. After that, if some business wants to name their LLC after the name chosen by you, then it is their choice.
If you have not dissolved your LLC, you are liable for business privilege tax, and if it is not paid on time, you are leveraged with 10% of the amount of tax or $50. After that, the additional penalties will increase by $1 per month. If it goes unpaid for a longer duration, then the chances of seizing your property can also recover the tax.
Yes, if you are dissolving your LLC, you have to pay some amount to the probate judge who was also present during your LLC formation in the probate office. The minimum fee of the judge is $50, which can vary.