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New York LLC DissolutionNot every limited liability company (LLC) lasts forever. In fact, many LLCs in New York are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of New York 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 York LLC dissolution process? Are there different processes for businesses based in New York 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 York LLC?

When closing a business registered as an LLC in the state of New York, 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 York 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 York 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 New York LLCs

Is your LLC based in New York, 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. 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 name it was originally registered under (if different), the date you filed your LLC’s Articles of Organization, the reason for dissolving your LLC, your signature and printed name, and contact information for returning your completed documents.

Once you’ve finished filling out this form, you can submit it to the Department of State via mail, fax, or by hand, along with your $60 filing fee. It’s worth noting that New York allows online filings for some LLC documents, but not for dissolutions.

These filings typically take seven business days for the state to process, not including mail wait times. If you want to expedite your order, you can upgrade to 24-hour service for $25, same-day service for $75, or two-hour service for $150.

But what does this process look like for a business that was formed outside the state and then expanded to New York?

Dissolution for Foreign LLCs in New York

If you operate a foreign LLC in the state of New York, the dissolution process looks quite different than it does for domestic entities. In fact, it’s actually technically called a termination or surrender rather than a dissolution.

To dissolve a foreign LLC in this state, there are two different processes depending on the status of your LLC in your domestic state. If your LLC is still operational in your domestic state, you’ll need to fill out the Certificate of Surrender of Authority.

This form requires the name of your LLC, the name your LLC used in New York (if different), the jurisdiction where you originally formed your LLC, the date you received your foreign qualification to operate your LLC in New York, an address for potential future service of process deliveries, the print name and signature of your authorized person, member, or manager, and your name and mailing address. Once you’re ready to file this document, you can submit it and your $60 filing fee to the Department of State by mail, fax, or in person.

What if you have also dissolved your LLC in your home (or domestic) state? In this situation, you will instead need to file a document known as the Certificate of Termination of Existence. There isn’t a set form to fill out for this filing — instead, you’ll need to make your own. This filing begins with a certified copy of your LLC’s dissolution paperwork from your domestic state, and you’ll also need to attach a cover sheet indicating that you are filing a Certificate of Termination of Existence and providing a mailing address. Just like the Certificate of Surrender of Authority, you can submit it and your $60 filing fee to the Department of State by mail, fax, or in person.

These filings typically take seven business days for the state to process, not including mail wait times. If you want to expedite your order, you can upgrade to 24-hour service for $25, same-day service for $75, or two-hour service for $150.

Involuntary Dissolutions in New York

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 York could involuntarily dissolve your LLC if a court deems that it is not reasonable to continue operating your business in accordance with your LLC’s operating agreement or Articles of Organization. Unlike in many other states though, New York will not dissolve your LLC for failing to file your biennial reports.

It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, New York does not have terribly strict policies for administratively dissolved LLCs. In fact, this state does not frequently dissolve LLCs involuntarily, unless requested by a member of the LLC against the wishes of their co-owners — even in these cases, the dissolution is more of a minority decision than it is “involuntary.”

Still, if you keep operating your business after the state 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.

In Conclusion

It’s not that the process for dissolving or withdrawing your LLC in New York 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 York? Take a look at the following resources: