Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Utah are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Utah has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Utah LLC dissolution process? Are there different processes for businesses based in Utah 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 Utah LLC?
When closing a business registered as an LLC in the state of Utah, 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 Utah 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 Utah 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 Utah LLCs
Is your LLC based in Utah, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Statement 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, your LLC’s Utah business entity number, the effective date of your dissolution, your signature, printed name, and the date.
When you’ve finished filling out this form, you can submit it to the Division of Corporations and Commercial Code by mail, online, fax, or in person. This filing has no fees associated with it.
If you submit your documents online or in person, the state will process them by the next business day. For mailed or faxed filings, you can expect a turnaround time of 5-7 business days, unless you expedite your order for $75, in which case the state will process your filing within two business days.
But what does this process look like for a business that was formed outside the state and then expanded to Utah?
Dissolution for Foreign LLCs in Utah
If you operate a foreign LLC in the state of Utah, 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 Withdrawal of Registration of a Foreign Limited Liability Company document. Much of the information for this form is the same as the info provided for the Statement of Dissolution, but there are some differences for the foreign version.
This form requires your LLC’s official business name, your Utah business entity number, the state you originally formed your LLC in, an address for potential future service of process deliveries, your signature, printed name, and the date.
Just like the Statement of Dissolution, you will submit this filing to the Division of Corporations and Commercial Code by mail, online, fax, or in person. This filing is free of charge.
If you submit your form online or in person, the state will process it within one business day. For mailed or faxed filings, it will take roughly 5-7 business days, unless you expedite your order for $75, in which case the state will process your filing within two business days.
Involuntary Dissolutions in Utah
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, Utah could involuntarily dissolve your LLC if you fail to pay any fee, tax, interest, or penalty assessed by the state within 60 days, fail to file an annual report within 60 days of its due date, or fail to maintain a registered agent for 60 days.
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 particularly punitive. If your LLC is administratively dissolved, you will need to correct the issues that led to your dissolution within two years, and also pay a $70 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 Utah 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 Utah? Take a look at the following resources: