If you’re looking for guidance on how to dissolve an LLC in NJ, you’ve come to the right place. As a business owner in New Jersey considering dissolving your LLC, you’ll want to follow these steps to ensure a smooth and legally compliant process.
To fast-track the LLC dissolution process, you may want to explore doola’s service. In the meantime, check out the following steps for dissolving the LLC on your own.
Understanding LLC Dissolution in New Jersey
LLC dissolution refers to the process of officially closing down a limited liability company (LLC). It’s a way of canceling your company’s legal existence, along with the termination of its liabilities, contracts, and assets.
Why Dissolve an LLC in New Jersey?
There are several reasons why you may choose to dissolve your LLC in New Jersey. One common scenario is when you no longer want to operate the business. Perhaps the market conditions have changed, or you wish to pursue other opportunities. You may decide to form a new entity that aligns with your new business goals. In such cases, dissolving your LLC allows you to officially close the business and move on to new opportunities.
All in all, dissolving your LLC in NJ allows you to start afresh without the legal and financial baggage of your previous company.
How to Dissolve an LLC in New Jersey in 7 Steps
As a business owner facing the decision to dissolve your LLC in NJ, you’ll want to review the following steps involved to ensure a smooth process.
1. Review Your LLC’s Operating Agreement
A good place to start is by reviewing your LLC’s operating agreement. Your operating agreement should contain specific provisions on how to dissolve the company. Familiarize yourself with the agreement and ensure you’re following all the outlined procedures. If you have any questions, it may be helpful to consult with an attorney.
2. Vote to Dissolve an LLC
The next step is to hold a vote to dissolve the LLC. Most states, including NJ, will require the permission of all LLC members to properly dissolve the LLC. Make sure to convene a meeting with everyone and get everything in writing. Make sure to refer back to the guidelines outlined in your operating agreement.
3. File Articles of Dissolution
Once you have the permission of all the LLC members, you can start preparing and filing the necessary legal paperwork. NJ allows you to dissolve your LLC online and through the designated online portal. You can learn more about the process here.
You’ll need to have information ready about when your business was formed, its 10-digit entity ID, as well as other relevant information.
4. Notify Tax Agencies and Pay Remaining Taxes
One of the key steps as you dissolve your LLC is to notify tax agencies and pay any remaining taxes owed. This includes filing all necessary tax returns, such as income tax and employment tax returns, with both the NJ Division of Taxation and the IRS. It is advisable to consult with a tax professional throughout this process to ensure the accurate completion of these filings.
5. Inform Creditors and Settle Existing Debt
You’ll need to notify creditors that your LLC will be dissolved to avoid any future legal issues. Make sure to pay off any outstanding debts and take care of other financial obligations. This will help you tie up any loose ends and create a clean break from the business. Plus, it’ll help you protect yourself and other LLC members from personal liability.
6. Wrap Up Other Business Affairs
Dissolving a business entails making sure there are no loose strings. To do this, you’ll need to:
Notify Suppliers and Customers
Inform your suppliers and customers about the impending closure. This helps manage existing contracts, orders, and accounts, ensuring a proper transition and preventing misunderstandings. Clear communication is essential to maintain business relationships and fulfill obligations.
Cancel Business Licenses and Permits
Cancel any licenses and permits that your business holds. This prevents you from incurring unnecessary fees or legal obligations. Notify the relevant government agencies of your intent to close the business and follow their specific procedures for cancellation.
Handle Employee Matters
If you have employees, you must address various employment matters. This includes notifying employees of the closure, settling payroll, providing information on benefits, and handling any severance packages if applicable. Comply with employment laws, such as providing required notices and final paychecks.
Close Company Bank Accounts
Close all business bank accounts associated with the company. Ensure that all outstanding checks and transactions are cleared. Notify your bank of the business closure and follow their procedures for closing accounts. This action helps prevent unauthorized use of the accounts after dissolution.
7. Asset Liquidation or Distribution
If your business has assets or investments, you need to decide whether to liquidate them and distribute the proceeds among members or shareholders, if applicable. Follow your operating agreement or state laws regarding asset distribution.
How Much Does It Cost to Dissolve an LLC in New Jersey?
In order to dissolve an LLC in New Jersey, you’ll be charged a $95 dissolution fee as well as a $25 tax clearance certificate application fee.
Should I Dissolve My LLC Myself or Hire an LLC Dissolution Service in New Jersey?
If you choose to handle the dissolution yourself, you will need to understand and follow the specific regulations and requirements set by the state of New Jersey. This includes filing the necessary paperwork, paying any outstanding fees, notifying creditors and employees, and closing all financial accounts. Dissolving an LLC can be a complex and time-consuming process, especially if you’re not familiar with the legal requirements.
Another option is to work with an LLC dissolution service. Such services specialize in handling the legal aspects of dissolving an LLC, ensuring that all necessary steps are completed correctly and promptly. One example is doola, which can help you save time and ensure you get the process right.
Choose doola for Smooth LLC Dissolution in New Jersey
doola, the one-stop-shop for small business resources, works to simplify what can be a complex and intricate procedure. We can help manage the LLC dissolution process and take the complexities off of your hands. Take a look at how doola can help you save time and avoid potential headaches.
How long does it take to dissolve an LLC in New Jersey?
The time to dissolve an LLC in New Jersey can vary but typically takes several months to complete, factoring in the necessary legal and administrative processes.
Can I dissolve my LLC without notifying my members in New Jersey?
In New Jersey, you generally need to notify LLC members about the dissolution, as specified in the operating agreement or by state law. Unanimous consent from all members might allow for dissolution without formal notification.
Can I dissolve my LLC if I have pending lawsuits in New Jersey?
You can dissolve your LLC in New Jersey even if you have pending lawsuits, but the lawsuits need to be addressed separately. Dissolution doesn’t automatically dismiss them.
Can I cancel my EIN once my LLC is dissolved in New Jersey?
You can’t cancel your EIN (Employer Identification Number) once your LLC is dissolved. Instead, update your business’s status with the IRS to avoid ongoing tax obligations.
What happens if I don’t properly dissolve my LLC in New Jersey?
Failing to properly dissolve your LLC in New Jersey can result in ongoing legal and financial liabilities, including taxes, debts, and contractual obligations.
Can I reopen a dissolved LLC in New Jersey?
It’s possible to reopen a dissolved LLC in New Jersey, but the process can be complex and may involve various requirements, such as addressing outstanding debts and fees. Consult with the New Jersey Division of Revenue for specific instructions on reinstating a dissolved LLC.