Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Idaho are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Idaho has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Idaho LLC dissolution process? Are there different processes for businesses based in Idaho 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 Idaho LLC?
When closing a business registered as an LLC in the state of Idaho, 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 Idaho 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 Idaho 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 Idaho LLCs
Is your LLC based in Idaho, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Statement of Dissolution, which can be filed on a paper form or online. This form will include some crucial information about your business, so you should fill it out carefully and accurately.
Among the info you’ll need to complete this form is the official business name of your LLC, the date your Certificate of Organization was originally filed with the state, a name and address to return a copy of the form to, and the printed name and signature of a manager, member, or other authorized individual.
After you’ve filled out the form, you will need to submit it to the Secretary of State’s office. If you prepared the form on paper, you’ll need to pay the state’s $20 manual entry fee, but online filing is entirely free. The typical turnaround time is roughly 7-10 days, but you can expedite your filing for an additional $40. If you need same-day service, you can pay an extra $100.
But what does this process look like for a business that was formed outside the state and then expanded to Idaho?
Dissolution for Foreign LLCs in Idaho
If you operate a foreign LLC in the state of Idaho, the dissolution process looks quite different than it does for domestic entities. In fact, it’s actually technically called a cancellation rather than a dissolution.
To dissolve a foreign LLC in this state, you’ll first complete the Cancellation of Certificate of Authority of Foreign Limited Liability Company document, which can be filed online or on a paper form. Much of the information for this form is the same as the info provided for the Statement of Dissolution, but there are some differences for the foreign version.
This form requires your LLC’s official business name, the name your business uses in Idaho (if different), the jurisdiction your business was originally formed in, contact information for potential future service of process deliveries, and the signature and printed name of a manager, member, or other authorized person.
Just like the domestic version, this filing is entirely free of charge if you file online. If you want to use a paper form, you can pay their extra $20 manual entry surcharge. The processing speed for this document is also 7-10 days, and you have the same $40 and $100 expedited options that apply to domestic filings.
Involuntary Dissolutions in Idaho
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, Idaho could involuntarily dissolve your LLC if you fail to file your annual report, fail to designate a registered agent or maintain one for at least 60 consecutive days, or you fail to notify the Secretary of State’s office within 60 days of a change or resignation of registered agent.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, the penalties can be even steeper than you might realize. For example, if you operate a foreign LLC and it’s administratively dissolved by the state, you cannot reinstate it, as reinstatements are only available for domestic LLCs in this state.
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 Idaho 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 Idaho? Take a look at the following resources: