Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Louisiana are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Louisiana has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Louisiana LLC dissolution process? Are there different processes for businesses based in Louisiana 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 Louisiana LLC?
When closing a business registered as an LLC in the state of Louisiana, 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 Louisiana 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 Louisiana 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 Louisiana LLCs
Is your LLC based in Louisiana, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Affidavit to Dissolve a Limited Liability Company, which you can fill out 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, the county where your LLC was registered, and the signatures of all your LLC members and/or organizers. It’s important to note that this form must be notarized. You will also need to include the state’s Transmittal Information form, which requires your business name, your personal name, and contact information.
When you’re done filling out this form, you can submit it to the Secretary of State along with your $100 filing fee. It usually takes the state around five business days to process your filing, although there are expedited options available. For 24-hour processing, you’ll need to pay an additional $30, while 2-4 hour processing is available for $50. In addition, if you deliver your documents to the Secretary of State in person, they will process your filing as you wait.
But what does this process look like for a business that was formed outside the state and then expanded to Louisiana?
Dissolution for Foreign LLCs in Louisiana
If you operate a foreign LLC in the state of Louisiana, the dissolution process looks slightly different than it does for domestic entities. In fact, it’s actually technically called a withdrawal rather than a dissolution.
To dissolve a foreign LLC in this state, you’ll first complete the Application for Withdrawal of a Foreign Corporation or Limited Liability Company From the State of Louisiana document. Much of the information for this form is the same as the info provided for the Affidavit to Dissolve, but there are some differences for the foreign version.
This form requires your business name, the county where your LLC was registered, the jurisdiction where you originally formed your LLC, the effective date of your withdrawal, and an address for potential future service of process deliveries, along with your signature and the date. This form needs to be notarized. You will also need to include the state’s Transmittal Information form, which requires your business name, your personal name, and contact information.
When you’re done filling out this form, you can submit it to the Secretary of State along with your $150 filing fee. It usually takes the state around five business days to process your filing, although there are expedited options available. For 24-hour processing, you’ll need to pay an additional $30, while 2-4 hour processing is available for $50. In addition, if you deliver your documents to the Secretary of State in person, they will process your filing as you wait.
Involuntary Dissolutions in Louisiana
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, Louisiana could involuntarily dissolve your LLC if you fail to file annual reports, but this state is actually quite forgiving when it comes to administrative dissolutions. They don’t charge any fees for involuntarily dissolved LLCs, and they don’t have any penalties for late annual reports either.
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, your LLC will never be allowed to operate in Alabama again if it is involuntarily dissolved. Instead, you would need to start the LLC formation process over again from the start.
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 Louisiana 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 Louisiana? Take a look at the following resources: