Steps to Dissolve an LLC in Nevada
If you plan to close a Nevada LLC then there are certain aspects of dissolution you need to be familiar with. There are times when businesses make the mistake of not focusing on certain key areas resulting in the dissolution documents not being accepted by the Secretary of State. These steps will ensure your limited liability company is dissolved in the proper way.
1. Meeting of LLC Members
The first and the foremost step towards dissolving Nevada LLC, is to arrange a meeting among LLC members or owners. There has to be a vote to dissolve the limited-liability company and everyone needs to agree on adopting a resolution to that effect. The resolution must include payment of all outstanding debts, obligations, and distribution of assets.
2. Close Tax Accounts of Your LLC
The second most important step towards dissolving an LLC in Nevada, is to ensure closure of all business tax accounts. An active Nevada limited-liability company may have several tax accounts like Modified Business Tax, Commercial Tax, or Federal Taxes and each of these accounts are maintained by IRS or the State government. Hence, you need to coordinate with the IRS as well as local taxing agencies to ensure all tax dues are cleared.
Some of the common taxes that your company needs to clear before you can close Nevada LLC include:
- Quarterly or annual employment tax return: This includes the Employee Withholding Tax and is for businesses that have or had employees. Normally businesses are required to file Forms 941 but small businesses withholding federal income taxes less than $1,000 have to file Form 944.
- Sales & Use Tax: If your business has been selling taxable services or products in Nevada then you need to clear the dues prior to dissolving a Nevada LLC. This is a monthly or quarterly tax that has to be filed with the Nevada Department of Taxation.
- Unemployment Insurance Tax: Each and every LLC formed in the state of Nevada has to pay unemployment insurance (UI) tax at a rate of 2.95 percent of the wages paid to each of the employees.
- Career Enhancement Program: Apart from unemployment tax, a limited liability company will be required to pay a tax of 0.05 percent of taxable wages for the Career Enhancement Program (CEP) in order to close a Nevada LLC.
- Commerce Tax: A limited-liability company will have to pay this tax only if their gross revenue exceeds $4,000,000 in a taxable year.
- Make federal tax deposits: In order to close a Nevada LLC, you will be required to file the “Employer’s Quarterly Federal Tax Return” using Form 941.
It is important to enclose Employer identification number (EIN) while filing any of the taxes. See Checklist of Taxes in Nevada for dissolving Nevada LLC.
3. Filing Articles of Dissolution
The process of dissolving Nevada LLC starts by filing “Articles of Dissolution” with the Secretary of State. The Articles are to be submitted by a limited-liability company that has opted for voluntary dissolution. The articles need to contain the following information pursuant to NV Rev Stat § 86.531 (2017):
- The name of the Nevada limited-liability company
- That the company has already been dissolved or will be dissolved
- The effective date and time of dissolving the Nevada LLC
- The type of dissolution or cancellation
The Articles of Dissolution should be signed by a manager or member of the company being dissolved. The signing authority can also be a personal representative of the last remaining member.
The signed articles of dissolution should be filed with the Secretary of State pursuant to NV Rev Stat § 86.541 (2017) in order to close Nevada LLC. The “Articles of dissolution” will become effective when you file it with the Secretary of State or on a later time and date as specified in the articles. This later date should not be more than 90 days after the date on which the articles have been filed.
The filing fee for articles of dissolution is $100 and it can be mailed, faxed or emailed to the Secretary of State. If you are sending by normal or expedited mail then it can be sent to Commercial Recordings Division, 202 North Carson Street, Carson City NV 89701-4201. The secretary of state offers 24-hour, 2-hour, and 1-hour expedited services at a higher fee.
4. Notifying creditors and settling claims if any
If you are dissolving a Nevada LLC, it is important to notify your creditors about the closure of the business. This is an integral part of distribution of assets and is governed by NV Rev Stat § 86.521 (2017). You need to inform creditors about:
- The intent to close your Nevada LLC or if you have filed the required documents for dissolution
- If any creditor has an outstanding claim then you will need to provide the mailing address where they can send their claim
- Provide creditors with a deadline for submitting their claim. The standard is 120 days from the date of notification of dissolving a Nevada LLC
- Provide a statement that no claims will be entertained after the deadline
The claims made by a creditor may be accepted or rejected by the business entity prior to dissolving a Nevada LLC. If the claims have been accepted then satisfactory arrangements need to be made for repayment.
5. Distribution of Remaining LLC Assets
In order to close a Nevada LLC, the remaining assets have to be distributed amongst the members in proportion to their share of ownership or ownership interests pursuant to NV Rev Stat § 86.521 (2017).
For example: If A owns 40% of the LLC, B owns 35%, and C owns 25% then the assets will be distributed accordingly, which means A will get 40 percent of remaining assets and so on.
These distributions have to be reported to the IRS by filing Form 990, 990-EZ or e-Postcard (990-N). The form you need to file during the dissolution of a Nevada LLC will depend on the assets and gross receipt.
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DISSOLVE LLC IN NEVADA