Business Dissolution:
Close Your Business the Right Way

• Ongoing annual fees and franchise taxes
• Late fees and penalties
• Difficulty forming new businesses
• Potential personal liability issues

Business dissolution is the formal process of closing your LLC or corporation with the state. It involves filing dissolution documents, settling debts, distributing assets, and canceling registrations to properly terminate your business entity.

If you don't properly dissolve, you'll continue to owe annual fees, franchise taxes, and annual reports to the state. You could also face penalties for non-compliance. Formal dissolution ends these obligations and provides legal closure.

The state will continue to require annual filings and fees. Eventually, the state may administratively dissolve your business, but not before accumulating late fees and penalties. This can also affect your ability to form new businesses.

Yes, part of the dissolution process involves settling outstanding debts and obligations. You'll need to notify creditors and ensure all business liabilities are addressed before distributing any remaining assets to members/shareholders.

The state filing itself typically takes 1–4 weeks. However, the complete process—including settling debts, distributing assets, and filing final tax returns—can take several months depending on your business complexity.

You'll need to file final federal and state tax returns, marked as "final." You should also cancel your EIN with the IRS (though the number itself is never reused). We recommend consulting with a tax professional.