Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Washington are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Washington has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Washington LLC dissolution process? Are there different processes for businesses based in Washington 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 Washington LLC?
When closing a business registered as an LLC in the state of Washington, 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 Washington 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 Washington 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 Washington LLCs
Is your LLC based in Washington, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Certificate 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 Washington Unified Business Identifier Number (UBI), the effective date of your dissolution, a return address, the date you’re filling out the form, and the name, title, signature, and address of your LLC’s authorized person.
When you’ve finished filling out this form, you can submit it to the Secretary of State online, by mail, or in person. There is no fee required to file this document. If you don’t expedite your order, the state merely says that they will process your filing “in order received.” If you do expedite your order for $50, they will process your filing in two business days, and if you drop off your forms in person, they can typically have them processed within one hour.
But what does this process look like for a business that was formed outside the state and then expanded to Washington?
Dissolution for Foreign LLCs in Washington
If you operate a foreign LLC in the state of Washington, 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 withdraw a foreign LLC in this state, you’ll first complete the Statement of Withdrawal of Foreign Registration document. Much of the information for this form is the same as the info provided for the Certificate of Dissolution, but there are some differences for the foreign version.
This form requires your LLC’s Washington Unified Business Identifier Number (UBI), the official business name of your LLC, the jurisdiction where you originally formed your LLC, an indication that your LLC is no longer conducting business in Washington, an indication that your LLC is revoking your registered agent’s responsibilities, the effective date of your withdrawal, an address for potential future service of process deliveries, the date, your name, address, title, and signature.
However, if you are withdrawing a foreign LLC because you dissolved or converted your LLC in your domestic state, you will instead fill out the Statement of Withdrawal of Foreign Registration on Dissolution or Conversion document. The information required is exactly the same as the Statement of Withdrawal of Foreign Registration.
Once you finish filling out the required form, you can submit it to the Secretary of State online, by mail, or in person. There is no fee required for either of these filings. If you don’t expedite your order, the state merely says that they will process your filing “in order received.” If you do expedite your order for $50, they will process your filing in two business days, and if you drop off your forms in person, they can typically have them processed within one hour.
Involuntary Dissolutions in Washington
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, Washington could involuntarily dissolve your LLC if you fail to pay any fee, interest, or penalty in a timely manner, fail to submit an annual report within 120 days of its due date, fail to maintain a registered agent for your LLC for 30 consecutive 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 can be even steeper than you might realize. For example, you would need to correct the issues that led to your LLC’s dissolution, reinstate your business by filling out a reactivation request in the state’s Corporations and Charities Filing System, and pay a $140 fee plus any delinquent fees. If you don’t do this within five years, your LLC will be permanently dissolved with no option for reinstatement.
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 Washington 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 Washington? Take a look at the following resources: