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Cancellation Process for a Delaware LLC

At some point, a business venture may find it necessary to cancel its LLC. There are many reasons business owners could decide to cancel their LLCs, such as:

Cancel LLC Cancel LLC
  • The business is no longer viable or profitable
  • The LLC has served its purpose
  • The members of the LLC are no longer compatible and wish to cease working together

 

Typically, the first thing business owners will want to do is talk to a tax professional and/or attorney to determine if cancelling the LLC is the best option for the company. If the circumstances call for the LLC to be cancelled, it is best to then consult your LLC Operating Agreement, which usually outlines your cancellation process.

Option One:

  • Ownership must vote unanimously to cancel the LLC

OR

  • Your LLC Operating Agreement may state that a particular percentage of LLC members can be in agreement to cancel the LLC

 

However, if you are canceling a Delaware LLC, the Delaware LLC Law offers another option:

  • Delaware LLC Law allows the LLC members who collectively own more than two-thirds of the company to agree by vote to cancel the LLC

Before you can cancel your LLC, you should typically terminate all your LLC's business affairs, such as:

  • Pending lawsuits
  • Asset allocation
  • State and federal taxes
  • Settle and close any outstanding business of the LLC
  • Sell or disseminate the LLC's property
  • Settle any liabilities the LLC may be facing, such as creditors' claims, loans or contracts
  • If your LLC has been registered to operate in other states, you must file additional forms in each of those states to terminate your Foreign Qualification

Franchise Tax Fees:

Business Bank Account:

  • It is typically wise to close your LLC's bank account before you file the Certificate of Cancellation; however, keep in mind there are fees associated with closing the LLC.

The most important step in the Delaware LLC cancellation process is to file a Certificate of Cancellation.

Steps to File a Certificate of Cancellation:

  1. Prepare the Certificate of Cancellation.
  2. One member (owner) of the LLC must sign the Certificate of Cancellation.
  3. Pay the cancellation fee and any outstanding Delaware Franchise Tax Fee.
  4. File the Certificate of Cancellation.

Please keep in mind that once a Delaware LLC is canceled, the company name becomes available for anyone else in the state to utilize.

The Safest, Most Efficient Way to Cancel Your Delaware LLC:

 

We can help you cancel your Delaware LLC in a professional and prompt manner. After you contact us in regard to cancelling your Delaware LLC 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 with the Delaware Secretary of State within 24 hours.

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 immediately forward it to you via email for your records.

Please live chat with us or click below:

 

cancellation process for LLC

 

It is very important to complete the cancellation process of a Delaware LLC; if you do not legally and officially cancel your LLC, your company will continue to be held responsible for the annual Delaware Franchise Tax Fee as well as your LLC's annual Registered Agent Fee until either the Registered Agent resigns or until the state of Delaware voids the company.

 

What Else Should You Do?

  • Write a letter to the IRS, requesting closure of your LLC's EIN Number
    • Include the full name of the LLC, its address and a copy of the Certificate of Cancellation.

 

Ready to cancel your Delaware LLC? Contact us via phone at 1-800-345-2677, email, Skype (Delawareinc) or Live Chat with one of our experienced specialists.

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