How to Dissolve an LLC in New York: A Complete Guide

Closing a business in New York isn’t simple—it’s a legal process with lots of moving parts. If you’re ready to end your LLC, you’ll need to follow the state’s rules for winding down and filing paperwork to avoid headaches later.

To dissolve an LLC in New York, you have to vote to dissolve the company as your operating agreement requires, file Articles of Dissolution with the Department of State, pay the $60 filing fee, and wrap up all business obligations.

There’s a fair bit of planning involved. You’ll want to resolve all taxes, debts, and business relationships before calling it quits.

Skipping steps or missing details can leave you exposed to future liabilities or surprise costs. Taking the time to properly close your New York LLC gives you legal protection and a little peace of mind.

Key Takeaways

• You’ll need a formal vote, to file Articles of Dissolution with the state, and to pay a filing fee.
• All business obligations—taxes, creditor notifications, asset distribution—must be handled before finishing the dissolution.
• Proper LLC dissolution formally ends the business and its compliance requirements, protecting you going forward.

Save the Hassle and Get Bizzee to Do It For You

As you can see, there is considerable work in doing a dissolution and in the interests of ensuring it is done correctly, many people use a service like Bizee to do the dissolution. It is quick, easy and comparatively cheap.

Understanding the Dissolution Process in New York

Dissolving an LLC in New York means following the state’s step-by-step process. You’ll need to file the right documents and notify the right people to officially shut things down.

Voluntary vs. Involuntary Dissolution

If you and your fellow LLC members decide to close up shop, that’s voluntary dissolution. You’ll kick things off with a formal vote, following the rules in your operating agreement.

Most agreements lay out how many votes you need to dissolve. Sometimes it’s a majority, sometimes everyone has to agree—it depends on what you wrote down when you started.

Involuntary dissolution is a different animal. That’s when the state steps in and shuts down your LLC, often because of:

• Unpaid taxes
• Not filing annual reports
• Fraudulent activities
• Court orders from member disputes

The New York Department of State can dissolve LLCs that ignore state rules. Involuntary dissolutions usually come with penalties and a messier wind-down process.

If your LLC gets dissolved by the state, you’ll need to fix the issues and pay any fees to get it reinstated.

When to Dissolve an LLC

You might consider dissolution if:

• The company has done what it set out to do
• The business keeps losing money
• Key members want out
• No one’s interested in taking over after retirement
• There are disputes that can’t be resolved

Financial red flags, like ongoing losses or mounting debt, often signal it’s time to close. Sometimes, the market just changes too much to keep going.

Tax timing can matter, too. Dissolving at certain times of year may help you out on your taxes, so it’s worth thinking about. There’s a bit of strategy here, honestly.

Legal Requirements for New York LLCs

New York has a checklist for dissolving an LLC. First, you need to file Articles of Dissolution with the Department of State, and yes, there’s a $60 fee.

Before you file, you’ll want to:

1. Pay off all state and federal tax bills
2. Let your creditors know you’re dissolving
3. Settle all outstanding debts
4. Cancel any licenses and permits

The Articles of Dissolution require your LLC’s name, the state ID number, the date you’re closing, and proof that you’ve paid your taxes.

After you pay off creditors, New York law says you have to distribute assets according to your operating agreement. Don’t forget to file final tax returns and cancel your LLC’s EIN with the IRS.

Step-by-Step Guide to Dissolving an LLC in New York

Dissolving your LLC in New York means checking off a list of legal steps and paperwork. Doing things by the book can save you from future tax and legal headaches.

Member Approval and Consent

Your first move is to get approval from the LLC members. The articles of organization and your operating agreement lay out the process.

Follow your agreement’s voting rules—some require a majority, others want everyone on board. Usually, you’ll need to:

• Hold a meeting with all members
• Record everyone’s vote
• Write up meeting minutes
• Draft a written resolution to dissolve

If your LLC doesn’t have an operating agreement, state law generally says a majority vote is enough. Keep thorough records of the approval process; you’ll need them when you file with the state.

Filing the Articles of Dissolution

Once members approve, it’s time to file Articles of Dissolution with the Department of State. This makes the dissolution official.

Include the following in your filing:

• LLC’s exact legal name
• Date you originally filed to form the LLC
• Dissolution date (now or in the future)
• Reason for dissolving
• Signature from an authorized person

The filing fee is $60. You can mail it in or drop it off in Albany. Processing usually takes about a week or so, but if you’re in a hurry, expedited service is an option for a higher fee.

Hang on to copies of everything you file. You never know when you’ll need them.

Notifying the New York Department of State

The Articles of Dissolution are your main notice to the state, but there are a few more things to wrap up. LLCs don’t technically need a formal tax clearance in New York, but you shouldn’t ignore your tax filings.

Make sure to:

• File your final state tax returns
• Pay any taxes you still owe
• Cancel your Certificate of Authority if you did business in other states
• Let the Department of Labor know you’re dissolving
• Cancel business licenses, permits, and registrations

The Department of State will publish notice of your LLC’s dissolution. This public notice helps protect you from future claims by letting creditors know you’re shutting down.

Winding Up Business Affairs

Now comes the “winding up” phase. You’ll need to settle all financial matters and distribute any remaining assets.

Here’s what you should do:

• Tell all known creditors you’re dissolving
• Pay off any debts
• Collect money owed to the LLC
• Distribute leftover assets to members based on ownership
• Close out business bank accounts
• Cancel credit cards and credit lines
• End leases and service contracts

It’s smart to keep a reserve of funds in case something unexpected pops up. New York requires you to pay creditors before giving anything to members.

Keep records of everything you do in this phase. Good documentation can protect you from personal liability if questions come up later.

Addressing Final Obligations and Compliance

Before your LLC is officially dissolved, you’ll need to wrap up any loose ends. Taking care of these responsibilities helps you walk away cleanly and avoid future hassles.

Settling Debts and Liabilities

Make a list of everyone the LLC owes—creditors, vendors, anyone expecting payment. Prioritize debts based on legal requirements and how much cash is left.

If you have secured debts, pay them off or return the collateral. Pay unsecured debts with whatever assets remain.

If you can’t pay everything, talk to a business attorney. There are specific legal steps for distributing limited assets, and you want to avoid personal liability.

Hang onto records of all payments and any deals you make with creditors. You might need those documents down the road.

Tax Clearance and Final Tax Returns

You’ll need to file your final federal and state tax returns. The IRS wants you to check the “final return” box to show it’s your last filing.

For federal taxes, file Form 1065 (if you’re a partnership) or your usual business tax form, and mark it as final. Attach a Schedule K-1 for each member showing their share of the business’s results.

New York doesn’t require a formal tax clearance for LLCs, but you still have to file your final state returns and pay any taxes owed—sales tax, employment tax, all of it.

Unpaid taxes can come back to bite you, even personally. If you need a Certificate of No Tax Due for some agency or just for your records, you can request one.

Notifying Creditors and Third Parties

Letting creditors and business partners know you’re dissolving is just good manners—and good business. The law doesn’t force you to notify every creditor, but it’s smart to do it anyway.

Send out notices to:

• Vendors and suppliers
• Landlords
• Business partners
• Clients with active contracts
• Banks and lenders
• Insurance companies

Your notice should include the LLC’s name, the dissolution date, contact info for claims, and maybe a deadline for submitting claims.

Don’t forget to cancel licenses, permits, and registrations with local and state agencies. Close business bank accounts after all checks clear and debts are paid.

Keep lines of communication open with anyone involved. That way, you can protect yourself and other LLC members from future misunderstandings or claims. It’s just the right way to finish things up.

Using an LLC Formation Service

Dissolving an LLC in New York takes a few key steps, and you really need to get them right. A lot of business owners turn to an LLC formation service, just to make everything less stressful.

These services jump in and tackle the paperwork and filings for you. They already know the specific requirements for articles of dissolution, so you’re less likely to run into mistakes that could cost you.

Benefits of using a formation service:

• Professionals handle all the documentation
• Way fewer errors and fewer delays
• You save a lot of time
• Experts walk you through the legal stuff

One service that comes up a lot is Bizee. They help with forming and dissolving LLCs, and they’ll prep the articles of dissolution and submit them, including the $60 filing fee.

Formation services also remind you about things like distributing assets and canceling business licenses. Those are absolutely essential steps in dissolving your LLC.

In New York, you have to file dissolution papers within 90 days after deciding to dissolve. If you’re forgetful, a formation service can keep you on track with those deadlines.

Sure, there’s a fee for these services. But honestly, for a lot of business owners, the time saved and peace of mind are worth it.

Important Considerations After Dissolution

Dissolving your LLC doesn’t mean you’re done with all responsibilities. You’ll still have to think about record-keeping and might face legal issues, even after your company is officially gone.

Record Keeping and Document Storage

After you dissolve your LLC in New York, you should keep all company records for at least seven years. That means things like:

• Tax returns and financial statements
• Meeting minutes and resolutions
• Customer and vendor contracts
• Employee records and payroll info
• Business licenses and permits (even if canceled)

New York State says you need to keep these records, just in case of audits or legal questions. Digital storage is fine—just make sure you can find everything and that it’s secure.

If possible, pick someone as your go-to record keeper. They should know exactly where everything is and how to access it if something comes up.

Some folks like to make a detailed index of all their stored documents and where to find them. It can save a ton of time later.

Potential Legal Consequences

Business owners need to know that creditors can still pursue claims against a dissolved LLC. In New York, creditors usually have about three years after dissolution to file claims.

Former members might still be on the hook for:

• Unpaid state and federal taxes
• Tax returns that never got filed
• Wages owed to employees
• Legal judgments that haven’t been resolved

The company’s operating agreement probably spells out some details about liability after dissolution. It’s smart to go over this with a legal professional—sometimes these documents are more complicated than they look at first glance.

If your business had professional liability insurance, think about keeping a “tail policy.” That sort of policy can extend coverage for claims that pop up after you close the business and might save you a headache later if someone sues over past work.