Learning how to dissolve an LLC in NJ requires deep understanding of several legal processes. Otherwise, you may face unpleasant consequences if not completed properly. From the documents to file, state obligations to fulfill, up to the distribution of remaining assets to the LLC members — our team will thoroughly assist you with every meticulous step of dissolving your business through this post.
How to Dissolve an LLC in NJ
Ensure Good Standing with the Division of Revenue
Under the law implemented by the state, the New Jersey Division of Revenue requires any registered business entity under its jurisdiction to be of good standing before proceeding with the dissolution process.
It means that your company must submit all pending state obligations, including annual report submissions, tax return filings, tax payments, and other fees. If your New Jersey LLC is currently revoked, our team’s advice is to reinstate it first and fulfill your penalties.
Vote to Dissolve NJ LLC
One of the first steps you must keep in mind when reviewing how to dissolve an LLC in NJ is getting the approval of the members. This process shall proceed while considering the provisions written in the operating agreement. The dissolution will only become legal if the percentage of votes reached the condition stated in the document.
Although not required, you should consider creating a document with all the board meeting minutes because it can impose legal significance in case of disputes with a member after the termination of business operation.
Winding Up
To dissolve a New Jersey LLC, the company must conclude and wind up all business affairs, including the responsibility to pay outstanding state taxes and fees, submit annual business reports, and distribute assets. LLCs may appoint a member to act as the manager and handle all these obligations.
Settle Debt
Every registered LLC in New Jersey is required by the law to pay dues with their creditors before businesses officially cancel their operations. And although it’s not mandatory, it’s a good practice to give the creditors notice about the steps they can take upon the closure of your New Jersey business.
There are specific articles a business must follow when giving notice, so our team recommends seeking legal advice with an attorney or a law firm.
Allocate Company Assets
After a New Jersey limited liability company successfully settles its debts, it’s now time to distribute remaining assets to the members. In the event of insufficient assets, a member can be paid back depending on the capital contribution made to the LLC.
On the other hand, should an LLC has excess profits, all members included in filings are entitled to an equal share. This process is best executed in the presence of an attorney.
File Certificate of Dissolution and Cancellation
Aside from the winding-up procedure, LLCs must submit the Certificate of Cancellation and the Certificate of Dissolution to the NJ Division of Revenue. An LLC may file these business articles through the mail, consult an online service provider, or access the state of New Jersey online system.
The certificate forms are readily available there. All you need to input is your business name, ten-digit identification number (entity number), date when LLC was formed, and type of corporation. After that, an LLC must pay the required processing fee through an electronic payment method.
If your business generates revenue, you may need to fill-up a tax clearance request form to acquire certification from the Department of Taxation clearing your business from pending taxes. As soon as all requirements have been received after the filing, the cancellation of your LLC is now ready to roll.
Aside from being excluded from annual reports and tax responsibilities, keep in mind that your company name will immediately be available for new businesses who want to form their corporation in the state [1]. If you still intend to use your trade name, going through the dissolution procedure may not be a good idea.
FAQ
How much does it cost to dissolve an LLC in NJ?
Dissolving an LLC in NJ costs a minimal processing fee of $100 for Domestic and $125 for Foreign LLC. Additional payments may incur if the procedure of dissolving your corporation went through a top-quality registered agent service provider. Seeking assistance from an attorney may also add to the expected expenses.
Conclusion
Understanding the proper procedure of how to dissolve an LLC in NJ is as crucial as dealing with a new business formation. Besides avoiding penalties in the future, proper dissolution will allow you to form another venture confidently.
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