How to Dissolve an LLC in North Dakota | LLC Closing Guide

Starting a North Dakota 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.

North Dakota LLC Dissolution

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.

How to Dissolve an LLC in North Dakota

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 North Dakota 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 meeting minutes or a consent form.
  • After that, a formal date for dissolving the LLC will be decided.
  • The next step is counting the asset available in LLC and dividing them among the stakeholders and members accordingly.
  • After that, the business’s creditors 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 North Dakota.
  • 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 can file online too.
  • 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.

Winding Up

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.

Tax clearance

If you are dissolving your LLC in North Dakota, 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 North Dakota, then there is a fixed cost that you have to bear. The fees charged by the government are $20, the details which are mentioned on the second page of the article’s 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 North Dakota LLC?

Dissolving a business in North Dakota is an essential thing. Without making a proper go at the dissolution, the company will still seem active. So if the company looks like in operation, it will be entitled to pay the dues too. There can be so many decisions that the company owners have to make. To dissolve an LLC in North Dakota is also their decision. But if they don’t do it according to the government, it will become mandatory. Here, let’s see why a company may decide to dissolve,

  • The frequent indecisiveness of the owners. 
  • The inability of the company to make better profits. 
  • The regular complaints of the clients and no action towards it. 
  • No will or money from the side of the owners to keep the company on. 
  • Death, insolvency, or insanity of a partner. 

Top Businesses in North Dakota!

According to the economy of the state, farming is the one that helps the economy a lot. There are so many different farm products related to the state, and they all induce better cash receipts. It is all about which industry is good to start an LLC in North Dakota and how. So, let’s check some of the main sectors of the state here, check them in the following points,

  1. Finance industry: The banking and the insurance industries are the ones that are making the state a better one. With the help of these businesses, everyone can get finance and more jobs too. The sector also made a considerable contribution to the economy. The amount that GDP got from this sector turned out to be $7.84 billion.
  2. Mining industry: The most valuable sector in the economy of North Dakota is this specific one. There are things like coal and petroleum gas that are providing stability to the economy. Other mined products like sand, gravel provide the most income to the state. It induced the amount of $7.27 billion for the contribution to the GDP.
  3. Government enterprises: We all need some services, and there is no better place than public companies. These sectors can provide economic strength to the state and also contribute a lot. People not only get better and free services, but they also get growth. The total amount of $5.5 billion was also contributed to the state GDP from this sector.

North Dakota LLC Dissolution Review

Time needed: 30 minutes.

Here’s a recap of the steps you must follow when dissolving your North Dakota LLC. Click on the steps in this list if you want to read the full detail.

  1. Use North Dakota 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.

  2. Close Tax Accounts

    Make sure you close all your tax accounts to avoid incurring further costs.

  3. 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.

F.A.Qs

Is there any filing fee the LLC owner has to pay for dissolving their LLC?

Yes, there is a minimal fee of $20, which North Dakota SOS charges to dissolve the legally registered LLC and proceed with removing their name from every tax list and benefits.

Is the revenue department clearance required for dissolution?

No, there is no requirement of revenue department clearance till the time the SOS of North Dakota accepts the dissolution form.

Can someone else take the name I use for my LLC?

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.

Are there any financial penalties if I don’t dissolve my LLC legally and miss the reports?

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.

Is there any fees of the probate judge who is taking the dissolution decisions?

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. 

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