Do you own a business in NC and want to close down due to debt or other reasons? If YES, here is a 8-step guide on how to dissolve an LLC in North Carolina. Dissolving a company is an official process of permanently closing your business. Even though filing the dissolution documentation with the state of North Carolina is certainly an important part of the process, it’s not the only step.
You are expected to also liquidate your business assets, settle any liabilities, and send legal notifications to anyone that had an interest in your company. You should note that failing to complete these steps might entail you as a business owner being held personally liable for any outstanding debts or liabilities of your limited liability company.
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How Much Does It Cost to Dissolve an LLC in NC?
There is a $30 filing fee to dissolve a North Carolina LLC. Once you submit documents before noon and pay a $200 expedite fee, you can have documents processed the same day. If you pay a $100 expedite fee, you can have documents processed within 24 hours (excluding weekends and holidays). Online filings are processed in 3-5 business days. All Documents for LLC or corporation dissolution are processed by the North Carolina SOS in seven to ten business days when mailed.
What Happens to Your Business Name After Dissolution?
Note that if the company was dissolved voluntarily the name is available 120 days after the effective date of dissolution. If the company was dissolved administratively, the name is available 5 years after the effective date of dissolution.
In addition, if you are late-filing the annual report, the North Carolina SOS will send you a Notice of Grounds for Administrative Dissolution. You have 60 days from the time the notice was mailed to correct the grounds for dissolution (file the report, pay the fee, appoint a registered agent, etc). If the entity does nothing to remedy the grounds by the deadline, the North Carolina SOS will terminate its authority to do business.
Note that once a North Carolina LLC is administratively dissolved, it can reinstate at any time. The LLC would file an Application for Reinstatement Following Administrative Dissolution. There is a $100 filing fee. The LLC would also have to file all of its late annual reports with current information. The fee for each LLC annual report is $200.
4 Steps to Dissolve an LLC in North Carolina
Have it in mind that a limited liability company (LLC) in the state of North Carolina is both established and dissolved by filing articles of organization or dissolution, respectively, with the Secretary of State. If you are interested in dissolving an LLC voluntarily in North Carolina, here are steps to take.
1. Meeting of the LLC Members
When looking to dissolve an LLC in North Carolina, the very first step is to consult the articles of organization and the operating agreement. Note that the dissolution is expected to comply with the terms of the articles of organization or the operating agreement. If dissolution is not covered in either of these documents, state law applies by default and a meeting of the members is called.
Nonetheless, a resolution to dissolve the LLC must be adopted by the members if a previous agreement wasn’t covered. The law in the state of North Carolina requires all members to agree to the dissolution in writing if neither the articles of organization nor the operating agreement detail a method for dissolution.
2. Articles of Dissolution
Once the members have reached a consensus to dissolve the LLC, by the method described in the articles of organization or the operating agreement or by unanimous consent, articles of dissolution must be filed with the Secretary of State.
Note that articles of dissolution tend to include the name of the LLC, the date of the filing of the articles of organization and any amendments, the legal basis for filing articles of dissolution (for example, written agreement by all of the members), and the effective date of the dissolution of the LLC. Also note that the North Carolina Secretary of State has an Articles of Dissolution form to download and execute. The filing fee for the articles of dissolution must be paid to be processed.
3. Winding Up the LLC
This is simply the process of resolving the final matters of the LLC. After the members vote to dissolve the LLC, it continues to exist to allow time for winding up the company. Usually, the LLC will designate one of the members to handle the winding up. Under North Carolina’s LLC Act, key winding up tasks include:
- Collecting LLC assets
- Disposing of LLC property that will not be distributed in kind to members
- Discharging or making provision to discharge LLC liabilities; and
- Distributing any remaining assets to LLC members.
However, when it comes to the last two listed items, discharging liabilities and making distributions to members, you are expected to make payments in a particular order. First, you must pay creditors, including LLC members who are creditors, to the extent permitted by law.
It is very crucial that you pay all outstanding taxes. After that, unless your formational documents provide otherwise, you should make distributions to current and former LLC members based, for example, on withdrawal from the company or on previous agreement of company managers.
Finally note that any assets remaining is expected to be distributed amongst members based on the terms of your articles of organization or operating agreement, or else proportionally based on each member’s contributions to the company after adjustments.
4. Provide Notice of Dissolution
Note that a notice of the dissolution of the LLC must be provided to known creditors of the LLC. This notice is expected to state a claim of any money owed, supplies a mailing address where claims are to be sent, and provides a deadline at least 120 days from the date of the written notice.
The notice must also state that any claims not received by the deadline are barred pursuant to North Carolina law. In addition, the notice of dissolution of the LLC is expected to be published in a newspaper, along with the request that parties with a claim against the LLC make those claims in accordance with the notice.
Note that this notice must be published once in the county where the LLC’s primary office was located and it must in very extensive details explain how to make a claim and provide a mailing address where the claim is to be sent. The notice must also state that any claims made against the LLC will be barred unless brought within five years of the publication of the notice.
Whether you’re dissolving a domestic or foreign limited liability company, the process isn’t complicated. The dissolution process is quite similar for foreign and domestic LLCs in North Carolina. You will simply need to file the form that corresponds to your business type.
However, note that taking the time to properly dissolve an LLC in North Carolina by having the correct agreements in place resolves any potential issues, including remaining property, and limits the ability of creditors to make claims against members for debts of the LLC in the future.
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