Not every limited liability company (LLC) lasts forever. In fact, many LLCs in New Jersey are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of New Jersey has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the New Jersey LLC dissolution process? Are there different processes for businesses based in New Jersey 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 New Jersey LLC?
When closing a business registered as an LLC in the state of New Jersey, 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 New Jersey 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 New Jersey 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 or Foreign New Jersey LLCs
It doesn’t matter whether you formed your LLC in New Jersey or expanded it to this state with a foreign qualification because the process is exactly the same either way. You’ll start your dissolution process with a document known as the Certificate of Cancellation, which you can file 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 New Jersey business entity number, the date your LLC was originally formed, the jurisdiction where you originally formed your business (if you operate a foreign LLC), the effective date of your cancellation, your reasons for canceling the LLC, your signature, printed name, and the date.
Once you’ve filled out the form, you will need to submit it in duplicate to the New Jersey Division of Revenue, along with your filing fee. For domestic entities, this fee is $100, while foreign entities need to pay a $125 fee. These filings can take up to a week to process, although there is expedited service available if you file by fax or in person. In these situations, an additional $25 can speed up your turnaround times to within 8.5 hours.
Involuntary Dissolutions in New Jersey
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, New Jersey could involuntarily dissolve your LLC if you fail to pay any fees or penalties within 60 days of their due dates, or if you fail to file your annual reports for a period of two years. In these situations, the state will place your LLC on an “inactive list” for 60 days. If you do not correct the problems within those 60 days, your business will be dissolved.
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 in this state aren’t all that steep. If your LLC is administratively dissolved in New Jersey, you’ll need to pay $75 for your reinstatement filing and also catch up with any late annual reports and/or unpaid fines.
Still, 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 New Jersey 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 New Jersey? Take a look at the following resources: