The final closure of a Utah LLC can mark the end of a business venture or the dissolution of an unused LLC. Regardless of the reason for closing the LLC, it’s important to take legal action to dissolve your LLC formally. This will prevent possible fees or penalties. Read on to understand how to dissolve an LLC in Utah.
Understanding LLC Dissolution in Utah
Dissolving a Utah LLC usually involves the closure of business operations or the termination of a specific activity. However, there are as many reasons to dissolve an LLC as there are business owners.
If you created an LLC and don’t need it anymore, dissolving it is the best course of action to avoid fees or penalties. Other examples: you will want to dissolve a Utah LLC when the company is no longer economically viable, if you’re moving on to other business ventures, or if the business purpose is completed.
Dissolving a Utah LLC is a key step in officially winding up a company’s affairs and dissolving its standing as a legal business entity. You will need to fill out the State of Utah Department of Commerce Division of Corporations & Commercial Code Statement of Dissolution for an LLC.
Why Dissolve an LLC in Utah?
The most common reason to dissolve an LLC in Utah is because you no longer need it. This can be because of various reasons. You might decide to close the business or pursue another business venture through a different business entity.
If you have multiple LLCs for multiple purposes, dissolving LLCs you don’t use can reduce costs and simplify management. Reasons to dissolve an LLC include:
- Loss of business viability
- The business is closed
- 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 Utah 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 Utah in 7 Steps
Dissolving a Utah LLC requires business owners to wind up the business and make an official filing to cancel the limited liability company. Here are the steps you’ll want to take to ensure complete LLC dissolution.
1. Review Your LLC’s Operating Agreement
First, it’s essential to understand the specific dissolution procedures outlined in your LLC’s operating agreement. It includes requirements on signatures, voting, or other procedures to dissolve the LLC. The operating agreement will also include information on members’ ownership of the LLC, their voting rights, and any other stipulations needed in the dissolution process.
2. Vote to Dissolve an LLC
Next, you must meet with all LLC members to discuss and approve the dissolution decision. The meeting can be done online or in person. For many LLCs, dissolution requires unanimous agreement, but you will need to check your LLC’s operating agreement.
3. File Articles of Dissolution
Next, you will need to prepare and file the necessary legal paperwork, known as Articles of Dissolution. You will file the Statement of Dissolution for an LLC in Utah with the Department of Commerce Division of Corporations & Commercial Code. Alternatively, you can file the Statement of Termination.
The mailing address is
State of Utah
Department of Commerce Division of Corporations & Commercial Code
PO Box 146705
Salt Lake City, Utah
You can also contact the department by email, phone, or fax at:
- Phone: (801) 530-4849
- Toll-free phone: (877) 526-3994
- Fax: (801) 530-6438
- Email: email@example.com
4. Notify Tax Agencies and Pay Remaining Taxes
Before terminating the Utah LLC, you must file all necessary tax returns, including income 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. Consider consulting a tax professional or CPA to complete these filings accurately.
5. Inform Creditors and Settle Existing Debt
When closing a Utah LLC, you will need to settle all debts and distribute assets. Start by paying off all credit card debt or loans. Then, be sure to notify creditors and close any lines of credit to protect the business credit while dissolving an LLC.
6. Wind Up Other Business Affairs
When closing a Utah LLC, you will need to wind up the business, which includes selling or distributing any assets such as machinery, inventory, or other assets. You will need to inform suppliers, customers, and key stakeholders. Likewise, if you have employees, inform them and make relevant plans for a severance package, letters of recommendation, or new job opportunities.
Finally, you will need to close business bank accounts, cancel business licenses, and close any other business accounts or lines of credit. If you used a Utah registered agent service, inform the registered agent and cancel the service.
Key steps of winding up a Utah LLC:
- Notify suppliers and customers
- Cancel business licenses and permits
- Handle employee matters
- Close company bank accounts
- Freeze company credit
7. Distribute Remaining Assets
Once all debts, obligations, and tax liabilities have been settled, 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, which may include equal portions or any other distribution as the final step in company dissolution.
How Much Does It Cost to Dissolve an LLC in Utah?
There is no filing fee to dissolve or terminate a Utah LLC. You can get expedited service for $75.
Should I Dissolve My LLC Myself or Hire an LLC Dissolution Service in Utah?
It’s possible to dissolve a Utah LLC yourself with a simple filing and additional steps to distribute assets and pay off debts. However, 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. Tapping into professional assistance to facilitate the process can free up time so you can focus on new opportunities.
How doola can Help You Dissolve a Utah LLC
When closing a Utah LLC, the many responsibilities of winding up the company, from tax filings to cancellation paperwork, can take significant time. Consider using doola’s dissolution services for customized support.
With doola, you will create an account and upload basic company information. Then, doola will prepare the Articles of Dissolution and get back to you if any additional information is needed. When the state confirms the dissolution, it will inform you immediately. Get doola LLC dissolution to save time!
How long does it take to dissolve an LLC in Utah?
It takes five to seven business days to dissolve an LLC in Utah. You can pay a $75 expedited fee for processing within 48 hours.
Can I dissolve my LLC without notifying my members in Utah?
You cannot dissolve a Utah LLC without written agreement from all LLC members. Under the LLC Act of Utah, you’ll need a written agreement signed by all members to approve the LLC dissolution.
Can I dissolve my LLC if I have pending lawsuits in Utah?
You cannot dissolve an LLC with pending lawsuits in Utah. However, according to Utah law, a court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the business.
Can I cancel my EIN once my LLC is dissolved in Utah?
You can’t cancel an EIN even if you close a Utah LLC. However, you do need to request closing of the account with the IRS and provide a letter 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. Find more on canceling your EIN here.
What happens if I don’t properly dissolve my LLC in Utah?
If you don’t properly dissolve your Utah LLC, you could still be responsible for filing taxes or annual reports. You could also be responsible for penalties or fines related to inadequate filings.
Can I reopen a dissolved LLC in Utah?
Yes, you can reopen a dissolved LLC in Utah. You may reinstate a domestic LLC or LP by filing the Application for Reinstatement with the Utah Divisions of Corporations and Commercial Code. You will also need to ensure that the state has the current information of the business entity, such as the address and registered agent.