Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Nevada are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Nevada has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Nevada LLC dissolution process? Are there different processes for businesses based in Nevada 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 Nevada LLC?
When closing a business registered as an LLC in the state of Nevada, 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 Nevada 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 Nevada 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 Nevada LLCs
Is your LLC based in Nevada, 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 Dissolution for a Nevada Limited-Liability Company, which can be completed 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 LLC’s Nevada entity identification number, the effective date and time of your dissolution, and the signature of an LLC manager or member.
You also need to complete the Customer Order Instructions form, which is attached to the Articles of Dissolution. This form asks for the name of your entity, the date, a return address, your name, a phone number, your preferred return delivery method, a description of your filing, your processing speed (more on this in a moment), and your method of payment. Once you’ve finished filling out these forms, you will submit them to the Secretary of State, along with your $100 filing fee.
The state of Nevada has a handy tool on their website that shows you which date’s business filings are currently being processed, which makes it easy to estimate your own turnaround times. While there isn’t a specific listing for dissolutions, we would expect these filings to take roughly as long as new business filings — at the time of this writing, these filings were taking around nine business days to process.
But what does this process look like for a business that was formed outside the state and then expanded to Nevada?
Dissolution for Foreign LLCs in Nevada
If you operate a foreign LLC in the state of Nevada, 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 for a foreign Limited-Liability Company Registration document, which you can fill out online or on a paper form. Much of the information for this form is the same as the info provided for the Articles of Dissolution, but there are some differences for the foreign version.
This form requires your LLC’s official business name, the name your LLC operates under in the state of Nevada (if different), your LLC’s Nevada entity identification number, the effective date and time of your cancellation, any other information you deem necessary, and your signature.
Like the Articles of Dissolution, the foreign version requires a Customer Order Instructions form, including the name of your entity, the date, a return address, your name, a phone number, your preferred return delivery method, a description of your filing, your processing speed (more on this in a moment), and your method of payment.
Once you’ve finished filling out these forms, you will submit them to the Secretary of State, along with your $100 filing fee. As with the domestic version, the Certificate of Cancellation currently has a nine-day turnaround time, but you should check the state’s website if you want up-to-date info about your processing times.
Involuntary Dissolutions in Nevada
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, Nevada could involuntarily dissolve your LLC if you fail to file your annual reports or renew your business licenses.
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, you will need to file several forms to get your LLC reinstated, including the Customer Order Instructions form, the Certificate of Reinstatement, a new Initial/Annual List, and a Registered Agent Acceptance document. You will also be required to pay the fees associated with all of these filings, as well as any late fees or fines you may owe. In short, it costs hundreds of dollars and takes quite a bit of time.
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 Nevada 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 Nevada? Take a look at the following resources: