1. Hold a member vote for consent to the dissolution.
In North Carolina, all members of an LLC must provide consent for dissolution. You can’t legally and voluntarily dissolve an LLC in North Carolina without written content from every member. This requirement isn’t imposed in all states.
2. Inform creditors of the intent to dissolve and settle any claims.
North Carolina law also includes specific creditor notification provisions in the case of dissolution. While these provisions give you another hurdle to jump through to dissolve a North Carolina LLC, they also make sure that the members of the company aren’t held accountable for claims that come up after the dissolution.
You must send notification of the dissolution in writing to all creditors of your LLC. In the notification, you’ll need to include:
● A mailing address where claims can be sent
● Necessary information to include in a claim
● A deadline, at least 120 days from the date of notification, after which claims will be barred
In North Carolina, creditors are barred from making claims to a dissolved LLC if the claim was made after the stated deadline.
3. File Articles of Dissolution with the North Carolina Department of State.
The next step in closing your business is to file a form L-07, Articles of Dissolution of Limited Liability Company with the North Carolina Secretary of State, Corporations Division (SOS). Note that before you can file Articles of Dissolution, you must first file any required annual reports with the North Carolina Secretary of State.
You can access and file this form by visiting the website of the North Carolina Department of State website. While Articles of Dissolution are available from this website, you can also draft your own articles to submit.
If you want to file your Articles of Dissolution in hard copy form, you’ll also need to submit a Cover Sheet for Corporate Filings. While a cover sheet isn’t required for all submissions, it’s wise to include one, as doing so will have you provide a method of return and email address in case of any problems with the filing.
A $30 fee must be paid to file Articles of Dissolution for an LLC in North Carolina. Accepted payment forms include cash, certified checks, money orders, and business or personal checks. You can also pay by credit card if you file online. Once filed, it will typically take the North Carolina Secretary of State approximately five to ten business days to process your Articles of Dissolution.
4. File a Form 996 and final tax return with the IRS.
In North Carolina, you don’t need to get tax clearance from the IRS before officially dissolving an LLC. But, you do need to check “final return” on Form 1065 to indicate to the IRS that it’s your final tax return.
You may also need to file Form 966 with the IRS after the LLC has been dissolved. If your dissolved LLC is required to file this form, it’ll need to be filed within 30 days of the approval of the final dissolution plan. This form just informs the IRS that the LLC has been legally dissolved so that further action can be taken if needed.
5. Cancel all local business licenses and permits.
To officially dissolve your North Carolina LLC, you need to cancel any licenses and permits held by your business. For local licenses and permits not handled through a North Carolina state agency, you’ll need to contact the local office at which you applied for a license or permit.
6. Distribute remaining assets to members.
After company debts, fees, and other obligations have been paid off in full, remaining assets are typically used to cash out the capital account for every member of the LLC. If there are assets left, they’ll be divided among the members according to ownership percentage.
7. Inform employees and clients.
In the dissolution of a North Carolina LLC, it’s important to maintain amicable business relationships. This is especially important if you plan to continue working in the same industry after the LLC is fully dissolved. So, contact employees and clients of the dissolution as professionally and promptly as possible.
The process of dissolving an LLC in North Carolina can be stressful. But, by conscientiously following the steps above, you can ensure that the business is closed as professionally as possible.
ClickDissolve is a simplified platform to help business owners closing down their business properly. We filed the dissolution paperwork with the state for your LLC or Corporation. All can be done with just a few clicks.
