Selling or Ending Your Business
How To Dissolve an LLC in Maryland
Dissolving a Maryland LLC
If you and other members of your organization are considering dissolving your LLC, it's important to address the required steps; otherwise, you could face administrative consequences and additional challenges associated with the dissolution of your Maryland LLC.
Before you file paperwork
Before anything is filed with the state to formally terminate the existence of the LLC, members of the LLC need to take certain actions. As a first step, members of the LLC need to approve the dissolution. This can be done in accordance with the operating agreement of the LLC or through a unanimous consent of the members approving the dissolution. Regardless of the method, the vote on the dissolution should be recorded in the minutes of the meeting in which it occurred. This can be helpful in the event that someone does not remember providing their consent.
What to file
You are responsible for taking the necessary actions to notify creditors prior to dissolving the Maryland LLC. This needs to occur a minimum of 19 days prior to filing your cancellation articles with the state of Maryland. Unlike other states, you are not required to obtain a Maryland Department of Revenue clearance statement before you can dissolve a Maryland LLC.
In addition to winding down the business and notifying creditors, you may want to file cancellation articles directly with the Maryland Department of Assessments and Taxation. By filing cancellation articles, you are formally terminating the LLC’s status as a business entity registered directly with the state. This is also referred to as the formal process of dissolution. This administrative step is required to terminate the obligations owed by the LLC.
We recognize that this process can be overwhelming and frustrating for someone in the midst of winding down the business of an LLC. To avoid the hassles associated, you can partner with our service and we will handle all aspects of dissolving your Maryland LLC for you.
The filing of articles of dissolution is technically optional, but it does provide finality to any outstanding liabilities to the LLC or the members. When filed, there are specific things that need to be included inside the document you submit to the state. You will also need to submit a fee for the dissolution of your Maryland LLC. We can expedite the filing processing for an additional fee.
The State of Maryland takes a long time in comparison with other states to process an LLC dissolution. You should not to hear back from the agency for at least ten weeks. However, many choose to go through the expedited processing option because it can be completed within 7 business days.
In addition to submitting the necessary materials for the articles of the cancellation, the Maryland LLC needs to list the address and name of a resident agent in Maryland who will accept service of process for a minimum of one year following cancellation. This individual must sign the document that consents to his or her appointment.
Impact of dissolution
Once formally dissolved with the state, the name of your Maryland LLC is not protected. Other entities may be eligible to use the name immediately. You also lose the right to exclusively do business and use your name on the date that the state of Maryland gives you a proclamation of forfeiture.
Don’t forget about taxes
You also need to make sure that all taxes owed by the LLC are paid and filed in a timely manner. If not, even if you filed your articles of dissolution, you can be assessed for additional penalties for the failure to pay and file any due and outstanding taxes.
While most dissolutions are voluntary, if certain administrative actions aren’t taken, your LLC can also be involuntarily dissolved. This can be the result of the failure to submit reports or file returns. For example, you are required in the state of Maryland to file an annual personal property return for each year that the LLC is officially registered. If the LLC does not file the required return by the due date of April 15th, the LLC is listed by the state as "not in good standing" and eventually the opportunity to do business in Maryland is forfeited. If you wish to revive your LLC, you will need to file what is referred to as a reinstatement.
Finally, remember that if you are authorized to do business in other states, you will need to follow the necessary procedures within those states to decrease your chances of facing additional consequences outside of Maryland. Swyft Filings can help with your withdrawal from any state where you are foreign qualified.