Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Kansas are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Kansas has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Kansas LLC dissolution process? Are there different processes for businesses based in Kansas 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 a Kansas LLC?
When closing a business registered as an LLC in the state of Kansas, 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 Kansas 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 Kansas 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 Kansas LLCs
Is your LLC based in Kansas, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Certificate of Cancellation, which can be filed online or on a paper form. 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, your business entity ID number, the reason for your dissolution, the effective date of the dissolution, your name, signature, phone number, and the date.
When you finish filling out the form, you can submit it to the Secretary of State along with your filing fee, which will cost $35 to file on a paper form or $30 online. If you submit your Certificate of Cancellation online, the state will process it immediately. If you submit it via mail, you can expect a 2-3 business day turnaround from the date the state receives your forms.
But what does this process look like for a business that was formed outside the state and then expanded to Kansas?
Dissolution for Foreign LLCs in Kansas
If you operate a foreign LLC in the state of Kansas, the dissolution process looks slightly 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 Certificate of Cancellation of Registration of Foreign Covered Entity document, which you can fill out on a paper form or online. Much of the information for this form is the same as the info provided for the domestic Certificate of Cancellation, but there are some differences for the foreign version.
This form requires your business entity ID number, your LLC’s name, the jurisdiction where the business was originally registered, contact information for potential future service of process deliveries, the effective date of the cancellation, and your name and signature. Like the domestic version, this form costs $35 to file on paper or $30 online. Online submissions are processed immediately, while paper forms take 2-3 business days.
Involuntary Dissolutions in Kansas
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, Kansas could involuntarily dissolve your LLC if you fraudulently formed it in the first place, violated state laws in a way that causes the forfeiture of the LLC’s articles of organization, fail to file your annual report, transact business in a “persistently fraudulent” or illegal manner, or abuse the power granted to it by the state.
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 for administrative dissolution in this state are relatively minor. For instance, to reinstate an involuntarily dissolved business in this state, you only need to pay a $35 reinstatement fee and file a simple form.
However, 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 Kansas 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 Kansas? Take a look at the following resources: