The limited liability company (LLC) has a well-deserved reputation for being a stress-free business structure. It enables you to partner with almost any person or company you choose, to avoid double taxation, and best of all, to protect your personal assets from being pursued as payment for the LLC’s debts. If you are thinking of forming an LLC, and especially if you have already formed one, then you are well aware of the information on why and how to form an LLC. It is just as important to know how and why to take an LLC out of existence as to bring one into existence. Failure to close your LLC in a proper manner could lead to lots of unforeseen hassles and expenses. An Alabama business law attorney can help you with the process of dissolving an LLC in Alabama.
Should You Close Your LLC?
Many business projects, including some that operate through an LLC business structure, are meant to be short-lived. You might choose to dissolve an LLC simply because you and the other members have finished what you set out to accomplish with the LLC and its activities. Of course, that is the best-case scenario. Many LLCs are meant to last a long time, but they close because of problems they encounter. These are some common reasons that members choose to dissolve LLCs:
- The business is not profitable
- The business the LLC is doing violates one or more laws, and dissolving the LLC may prevent or reduce civil or criminal penalties
- One or more members of the LLC is stealing or intentionally wasting the LLC’s assets
- The decision to form the LLC was made because of fraud or duress on the part of one or more members
Once you have decided to dissolve your LLC, follow the process to wrap up its activities and dissolve the LLC as a legal entity.
How to Dissolve an LLC
The first step to dissolving an LLC is to file its final tax return and to pay any remaining tax obligations. The State of Alabama will not dissolve an LLC that owes taxes. After you have done that, you can file the Articles of Dissolution form for your LLC. Alabama law requires that the form be completed on paper and submitted by postal mail.
A Business Attorney Can Help
You may require the help of a lawyer to dissolve your LLC. At the very least, you should have a lawyer review your Articles of Dissolution form before you file it. In some cases, dissolving your LLC will be enough to resolve your disputes with the other LLC members, but in some cases it will not. A business law attorney can help you explore the options for business litigation, if necessary.
Let Us Help You Today
It is important to follow proper legal and accounting procedures when dissolving an LLC or other business entity in Alabama. Contact the Alabama business litigation & corporate law attorneys at Cloud Willis & Ellis for a consultation.