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Liquidating and Leaving: How to Dissolve an LLC in Minnesota
Building and growing a Minnesota business requires determination, hard work, and persistence. However, there may come a time when, despite your best efforts, it’s necessary to close the doors.
Whether you’re closing a business due to changing circumstances or simply fulfilling the purpose of an LLC, it’s essential to follow the correct steps to wind down the company.
Dissolving an LLC in Minnesota involves a straightforward process, but it’s crucial to get it right to avoid complications.
In this guide, we’ll walk you through the necessary steps to dissolve an LLC in Minnesota.
And if you have any questions along the way, doola’s experts are available to provide clear answers and support for all your dissolution queries.
Understanding LLC Dissolution in Minnesota
Dissolving an LLC in Minnesota can make sense for a variety of reasons. If you created an LLC and you don’t need it anymore, dissolving it is the best course of action to avoid fees or penalties.
Typically, you will dissolve a Minnesota LLC when the company is no longer economically viable, if the business purpose is completed, or if you’re moving on to other business ventures.
Dissolving a Minnesota LLC is a key step in officially winding up a company’s affairs and dissolving its standing as a legal business entity.
In Minnesota, you’ll need to dissolve an LLC by filing with the Minnesota Secretary of State. You can file the document for dissolution online at www.sos.state.mn.us, by mail, or in person. If you have questions, you can contact them by phone at 1-877-551-6767 or 651-296-2803 for the Saint Paul metro area.
Why Dissolve an LLC in Minnesota?
Business owners choose to dissolve an LLC for a variety of reasons. If you no longer want to operate the LLC or no longer need the LLC, it’s usually best to dissolve it.
For example, if you want to pursue another business venture through a different business entity, you could dissolve the LLC which is no longer needed.
Likewise, if you have multiple LLCs for multiple purposes, dissolving LLCs you don’t use can simplify filing and management and reduce costs.
Reasons to dissolve an LLC include:
✅ Loss of business viability
✅ The business is closed
✅ Bankruptcy
✅ The LLC is no longer needed
✅ The business is no longer allowed to operate in the US
Note that if you’re a visa holder who created an LLC, you don’t need to dissolve a Minnesota LLC that is still in use or has a business purpose, even if you’re no longer in the US.
How to Dissolve an LLC in Minnesota in 7 Steps
Dissolving an LLC in Minnesota is simple. You’ll need to complete the winding up activities to close the business and file with the Minnesota Secretary of State.
Procedures are usually outlined in the operating agreement. Here are the steps to take:
1. Review Your LLC’s Operating Agreement
It’s essential to understand the specific dissolution procedures outlined in your LLC’s operating agreement.
This will usually include information on member’s ownership of the LLC and their voting rights, as well as dissolution procedures. It will also note the signatures, voting, or other procedures required to dissolve the LLC legally.
2. Vote to Dissolve an LLC
Convene a meeting with all LLC members to discuss and approve the dissolution decision. According to any guidelines outlined in the operating agreement, this can be done online or in person and may require unanimous agreement.
3. File Articles of Dissolution
Prepare and file the necessary legal paperwork, known as Articles of Dissolution, with the appropriate state agency responsible for LLC registration.
In Minnesota, this filing must be made with the Secretary of State. You’ll start by filing with the Minnesota Secretary of State. You can file the document for dissolution online at www.sos.state.mn.us. Alternatively, you may file by mail or in person at:
Minnesota Secretary of State – Business Services
First National Bank Building
332 Minnesota Street, Suite N201
Saint Paul, MN 55101
The office is staffed between 8 am and 4 pm, Monday through Friday, except for holidays. You can contact them by phone at 1-877-551-6767 or 651-296-2803 for the Saint Paul metro area.
4. Notify Tax Agencies and Pay Remaining Taxes
Ensure you file all necessary tax returns, including income tax and employment tax returns, with the appropriate tax authorities. When filing taxes with the IRS, you must check the final return box on your company’s federal tax forms.
Consult with a tax professional from doola to accurately complete these filings.
5. Inform Creditors and Settle Existing Debt
A key part of closing a Minnesota LLC is settling all debts and distributing assets. Make a plan to pay off all credit card debt or loans. Be sure to notify creditors and close any lines of credit as part of dissolving an LLC.
6. Wind Up Other Business Affairs
Depending on the nature of the business, you may need to sell machinery, inventory, or assets, as well as inform suppliers, customers, and other key stakeholders. If you have employees, you’ll need to inform them and make relevant plans for a severance package, letters of recommendation, or new job opportunities.
You’ll also want to close business bank accounts, cancel business licenses, and close any other business accounts or lines of credit. If you have used a Minnesota registered agent service, you will need to inform the registered agent and cancel the service.
Winding up a Minnesota LLC checklist:
👉 Notify suppliers and customers
👉 Cancel business licenses and permits
👉 Handle employee matters
👉 Close company and business bank accounts
Help at your disposal: The Ultimate Checklist for Closing a Business Down
7. Distribute Remaining Assets
Once all debts, obligations, and tax liabilities have been settled, the final step for the Minnesota LLC is to distribute the remaining assets and profits among the LLC members according to the agreed-upon terms outlined in the operating agreement.
The LLC operating agreement outlines the percentage of ownership of each member and the distribution of assets. Distribute assets among the LLC members to finalize the company dissolution.
How Much Does It Cost to Dissolve an LLC in Minnesota?
You’ll need to pay a $35 filing fee to dissolve an LLC in Minnesota by mail or $55 for expedited in-person dissolution. You can pay by check made payable to the MN Secretary of State or online by credit card.
Should I Dissolve My LLC Myself or Hire an LLC Dissolution Service in Minnesota?
It’s possible to dissolve an LLC yourself with a simple filing and additional winding up steps. However, as a business owner, getting professional help can save you both time and money, even in company dissolution.
The support of a tax professional, lawyer, or professional dissolution service can provide the expertise and support you need to deal with tax filings, distribution of assets, or debt payments.
Even with a simple dissolution, tapping into professional assistance to facilitate the process can be hugely advantageous. You could hire professionals to handle the dissolution for you, freeing up time so you can focus on new opportunities.
Get doola to Help You Dissolve a Minnesota LLC
Wrapping up business operations involves several critical steps, including managing employees, settling debts, filing necessary tax forms, and submitting the correct dissolution paperwork. doola offers a straightforward LLC dissolution service designed to simplify this process.
With doola, you create an account, upload your company’s basic information, and we take care of preparing and filing the Articles of Dissolution with the state of Minnesota. Once the dissolution is confirmed by the state, you’ll be notified immediately.
Additionally, doola provides support for tax filings and accounting needs required before dissolution, ensuring your business meets all compliance requirements. Our service is designed to save you time and ensure a smooth and efficient business closure.
Book a free consultation with doola today, and let our experts guide you through every step of the dissolution process.
FAQs
How long does it take to dissolve an LLC in Minnesota?
If you file dissolution documents online, a Minnesota LLC is usually dissolved within one business day. If you bring the dissolution documents to the Minnesota Secretary of State, they will be processed while you wait. For filings you mail in, the LLC dissolution will usually be processed within seven to 10 business days after filing.
Can I dissolve my LLC without notifying my members in Minnesota?
You generally cannot dissolve a Minnesota LLC without informing the members. The procedure of dissolution for the LLC will be outlined in the operating agreement.
Can I dissolve my LLC if I have pending lawsuits in Minnesota?
You cannot dissolve an LLC with pending lawsuits in Minnesota. You must pay all debts and liabilities, and the Minnesota LLC must have no lawsuits pending.
Can I cancel my EIN once my LLC is dissolved in Minnesota?
You can’t cancel an EIN even if you close the business, but you need to inform the IRS to close the business account. You can send a letter to the IRS with the complete legal name of the entity, the EIN, the business address, a copy of the EIN Assignment Notice issued with your EIN, and the reason for closing your account. Find more on canceling your EIN here.
What happens if I don’t properly dissolve my LLC in Minnesota?
If you don’t properly dissolve a Minnesota LLC, you could be held personally liable for unpaid debts or taxes of the LLC. You will also need to pay annual filing fees and may face potential fines.
Can I reopen a dissolved LLC in Minnesota?
You can pay a $25 fee and file an annual renewal to reopen a dissolved LLC in Minnesota. You can do this online with the Minnesota Secretary of State.
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