Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Arizona are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Arizona has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Arizona LLC dissolution process? Are there different processes for businesses based in Arizona and those expanded from other states? When do you need to dissolve your LLC? We’ll answer all of these questions and more in this article.
How Do You Dissolve an Arizona LLC?
When closing a business registered as an LLC in the state of Arizona, you’ll need to take care to dissolve your business exactly as the state outlines. The most important part of this process is filing the correct paperwork with the relevant legal entities, but this is far from the only vital step.
In addition to filing documentation of your Arizona LLC dissolution, you will need to liquidate the assets of your business, notify all individuals and business entities that have an interest in your company, and resolve any outstanding liabilities with vendors, suppliers, or clients.
There are potentially severe penalties for failing to comply with the Arizona LLC dissolution process, and you as a business owner could be personally responsible for your LLC’s liabilities and debts. Therefore, it’s extremely important that you complete each step outlined in this guide to ensure an effective and compliant dissolution.
As for the question of when you should dissolve your LLC, you should do this as soon as you’re certain you will no longer conduct business through this entity. This gives you an opportunity to close up shop with the knowledge that you’re not transacting any business after you start the dissolution process.
Dissolution for Domestic Arizona LLCs
Is your LLC based in Arizona, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Articles of Termination. This form will include some crucial information about your business, so you should fill it out carefully and accurately. That said, this document requires so little information that it’s nearly impossible to get it wrong.
Among the info you’ll need to complete this form is the official business name of your LLC, along with the signature and printed name of the person filing the form. This is to indicate to the state that your LLC has distributed all its assets and properties in preparation for dissolution. You also need to fill out a cover sheet and submit it with your Articles of Termination document, along with your $35 filing fee.
The cover sheet requires you to select your processing speed. You can select standard processing for no extra charge, and this option will see your dissolution processed according to the schedule posted on the Arizona Corporations Commission website. These processing times can vary, but at the time of this writing, the wait time was 15-17 business days.
You also have the option to upgrade to expedited processing for $35, which speeds up your dissolution to roughly 5-7 business days. You can even upgrade to next-day service for $100, same-day service for $200, or two-hour service for $400.
After you’ve filled out these forms, you will need to submit them by mail or in person to the Arizona Corporations Commission, along with your payment. If you’re submitting your documents in person, you can pay with cash, a check, a money order, or a credit card, but if you’re submitting via mail, a check or money order is your only option.
But what does this process look like for a business that was formed outside the state and then expanded to Arizona?
Dissolution for Foreign LLCs in Arizona
If you operate a foreign LLC in the state of Arizona, the dissolution process looks quite similar to the process for a domestic LLC, although you will need to file a different form. The document for foreign LLC dissolutions in this state is called the Statement of Withdrawal of Foreign LLC or Foreign Series Registration.
Much like the Articles of Termination, the Statement of Withdrawal requires very little information. All you need is the exact name of your business, along with the name and address where the state can send future service of process documents now that you no longer have a registered agent. You will also need to sign and print your name, along with the date.
This form should also be filed with a cover sheet and you have the same options for expediting your filing that you had for a domestic dissolution. The only difference in this area is that the Statement of Withdrawal form costs just $10 to file instead of $35.
Involuntary Dissolutions in Arizona
We should also discuss the potential for an LLC to be involuntarily dissolved by the state. There are several reasons this could happen, and most of them revolve around significant mistakes made by the LLC’s ownership group.
For instance, Arizona could involuntarily dissolve your LLC if you fraudulently formed it in the first place, fail to pay your state taxes or any relevant filing fees, fail to maintain a registered agent, fail to complete the LLC’s publication requirement, or otherwise abuse the privilege to operate a business in Arizona.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. In Arizona, an involuntarily dissolved LLC can only be reinstated within six years of the dissolution date, and you’ll need to pay a $100 fee along with any other payments you may have missed.
In addition, if you keep operating your business after the state involuntarily dissolves it, you could open yourself up to all sorts of legal issues due to the continued operation of a non-compliant entity. In general, you should be as careful as possible when it comes to following the rules and regulations in this state.
It’s not that the process for dissolving or withdrawing your LLC in Arizona is terribly difficult. However, it is a process that you need to take great care to complete in a compliant fashion, or you could expose your business to a wide variety of potential legal complications and financial penalties. Trust us when we say it’s much smarter and easier to simply follow the directions with care to avoid any issues.
Do you need more information about operating an LLC in Arizona? Take a look at the following resources: