Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Wisconsin are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Wisconsin has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Wisconsin LLC dissolution process? Are there different processes for businesses based in Wisconsin 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 Wisconsin LLC?
When closing a business registered as an LLC in the state of Wisconsin, 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 Wisconsin 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 Wisconsin 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 Wisconsin LLCs
Is your LLC based in Wisconsin, 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 date you originally filed your Articles of Organization, the reason for dissolving your LLC, your name, title, signature, phone number, mailing address, and the date.
When you’ve finished filling out this form, you will submit it to the Wisconsin Department of Financial Institutions (DFI) online, by mail, or in person. This form has a $20 filing fee. The typical turnaround time for this filing is five business days, but you can expedite your order for an additional $25, which will speed up your processing time to just one business day.
But what does this process look like for a business that was formed outside the state and then expanded to Wisconsin?
Dissolution for Foreign LLCs in Wisconsin
If you operate a foreign LLC in the state of Wisconsin, 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 Foreign Limited Liability Company Withdrawal Application document. Much of the information for this form is the same as the info provided for the Articles of Dissolution, but there are some differences for the foreign version.
This form requires your LLC’s official business name, the jurisdiction where your business was originally registered, the mailing address of your principal office, the execution date, your name, title, and signature.
When you’re done filling out this form, you can submit it online, by mail, or in person to the Department of Financial Institutions. There is a $40 fee that applies to this filing. The typical turnaround time for this filing is five business days, but you can expedite your order for an additional $25, which will speed up your processing time to just one business day.
Involuntary Dissolutions in Wisconsin
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, Wisconsin could involuntarily dissolve your LLC if you fail to file an annual report for several years.
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 harsh. For example, you would need to file your missing annual report(s) within 60 days of receiving your Notice of Administrative Dissolution. If you miss this deadline, you’ll need to call the DFI’s office at 608-261-7577 to request the necessary forms to get your LLC reinstated.
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 Wisconsin 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 Wisconsin? Take a look at the following resources: