Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Ohio are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Ohio has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Ohio LLC dissolution process? Are there different processes for businesses based in Ohio 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 an Ohio LLC?
When closing a business registered as an LLC in the state of Ohio, 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 Ohio 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 Ohio 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 Ohio LLCs
Is your LLC based in Ohio, and registered as a domestic entity in this state? Or perhaps you formed your LLC elsewhere and then expanded it to Ohio? Either way, you’ll start your dissolution process with a document known as the Certificate of Dissolution of Limited Liability Company / Cancellation of Foreign Limited Liability Company, which you can fill out on a paper form or online. 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 if you operate a domestic entity is the official business name of your LLC, your Ohio Registration Number, the effective date of your dissolution, and the name and signature of an authorized representative of your LLC.
Even though foreign entities use the same form, the information included is slightly different than it is for domestic LLCs. Foreign LLCs need to fill in their business names, the name used in Ohio (if different), the jurisdiction where your LLC was originally formed, your Ohio Registration Number, whether or not you’re revoking your registered agent, an address for potential future service of process deliveries, and the name and signature of an authorized representative of your LLC.
Along with the Certificate of Dissolution / Cancellation, you will need to file the attached cover letter, which includes your contact information for the return of your completed documents and also indicates your preference for shipping speeds.
Once you’ve filled out these forms, you can submit it along with your $50 filing fee to the Secretary of State via mail, in person, or online. Typically, dissolutions take 3-7 business days, but Ohio has several expediting options to speed things up. For two-day service, you can pay an extra $100, while one-day service is available for $200. Meanwhile, four-hour service costs $300 extra.
In addition, you should also make sure your LLC has no outstanding tax obligations with the state.
Involuntary Dissolutions in Ohio
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, Ohio could involuntarily dissolve your LLC if you fail to maintain a statutory agent for your business or if you have tax obligations that go unfulfilled.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, Ohio doesn’t have harsh penalties for administrative or involuntary dissolutions. To get your business back in good standing, you only need to fix the issues that caused the dissolution and pay a nominal $25 fee.
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 Ohio 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 Ohio? Take a look at the following resources: