Closing an LLC or Corporation

At some point in your Delaware business’ lifecycle, you may find it necessary to close your company. There are a number of reasons you may find to do so, but we're here to help with the process of Canceling your Delaware LLC or Dissolving your Delaware Corporation.

Dissolving vs Canceling a Business: What's the Difference?

Many people use the terms "dissolving" and "canceling" interchangeably when referring to an LLC or corporation. While both terms represent the same result (closure of the company), it is important to note that, technically, they are distinct processes.

The correct term depends on whether you own a corporation or an LLC. In Delaware, "dissolution" refers to the process of closing a corporation through the filing of a Certificate of Dissolution. Closing an LLC, on the other hand, requires "canceling" through a Certificate of Cancellation. 

While the difference in meaning is small, each process has unique paperwork that needs to be filed properly with the State of Delaware in order to correctly close a company.

How to Cancel a Delaware LLC

Typically, the first step to canceling your Delaware LLC is to look at your LLC Operating Agreement. This should outline the steps to cancellation. If your operating agreement does not have adequate steps in the cancellation process, it is best to consult an attorney to determine if canceling the LLC is in the owners or members best interest. Under Delaware law, if more than two-thirds of members of an LLC agree to cancel, the majority typically can move forward with doing so. This is referred to as voluntary cancellation.

Things to consider before filing a Certificate of Cancellation

When canceling a Delaware LLC, you should typically terminate all of your business affairs such as settling pending lawsuits, allocating assets, paying your employees, and paying all other taxes and or fees that are outstanding. To cancel an LLC, the owner will need to pay a Certificate of Cancellation fee plus pay outstanding Franchise Tax (any past due years plus late fees and interest). Fill out the contact form at the bottom of the page to get the Delaware LLC cancellation process started.

How to Dissolve a Delaware Corporation 

Those who would like to Dissolve a Delaware Corporation will need a Certificate of Dissolution issued by the State of Delaware. To start dissolving a Delaware corporation, the company will need to pay a company dissolution fee as well as file all Franchise Tax reports and pay all Franchise Taxes due, including any late penalties and interest. Generally, if a Delaware corporation has a bank account, the business will often close the bank account before filing the Certificate of Dissolution. If you have any questions or concerns while dissolving your Delaware corporation, our team of experts will guide you through each step. Fill out the contact form at the bottom of the page to get the process started.

The Safest, Most Efficient Way to Close a Delaware Business

Harvard Business Services, Inc. can help you cancel your Delaware LLC or dissolve your Delaware Corporation in a professional and prompt manner. After you contact us in regards to closing your LLC or corporation, and you submit your payment, we will expertly assemble the required paperwork and forward it to you via email or fax for your signature.

After you sign and return it to us by fax, mail or email, we will file the Certificate of Cancellation or Certificate of Dissolution with the Delaware Secretary of State within 24 hours.

After delivering your certifcate for closing a Delaware company, the Delaware Division of Corporations generally takes three to five (3-5) business days to return the receipt of filing to us. Once we receive it, we will immediately forward it to you via email for your records

It is very important to complete the process of closing your Delaware company. If you do not legally and officially cancel your LLC or dissolve your corporation, your company will continue to be held responsible for the annual Delaware Franchise Tax Fee as well as your annual Registered Agent Fee until either the Registered Agent resigns or until the State of Delaware voids the company.

Steps After You Receive a Copy of the Certificate of Cancellation or Certificate of Dissolution

After you close an LLC or corporation with the State of Delaware, typically clients will write a letter to the IRS, requesting closure of your EIN Number. Assistance with this can be handled by an accountant or tax professional.

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Since 1981, Harvard Business Services, Inc. has helped form 406,441 Delaware corporations and LLCs for people all over the world.

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