Dissolving a Texas 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 Texas 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
Texas operates differently than most of the other 49 states regarding dissolution. You are first responsible for winding down the business, which includes providing notice to and paying all LLC liabilities, debts and obligations; distributing properties and provisions among LLC members; and finalizing lawsuits or litigations.
After completing these steps, you must obtain a certificate of account status (Form #05-305) from the Comptroller of Public Accounts indicating that all taxes have been paid and your LLC is in good standing for termination. You must file Form 05-359 (Request for Certificate of Account Status) with the CPA (available online). Processing can take 4-6 weeks. You will need to attach your certificate of account status to your certificate of termination.
The instructions for the certificate of termination form (Form 651) are available from the Secretary Of State website. You should provide the effective date for the certificate, which may be the filing date or a date not more than 90 days from the date the certificate is signed. The form should be signed by an authorized manager, depending on how the LLC in managed. There is a fee to file the certificate, and the certificate is usually processed within 3-5 business days. There is also an option to file the certificate of termination online.
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 Texas LLC for you.
Impact of dissolution
Once formally dissolved with the state, the name of your Texas LLC is not protected. Other entities may be eligible to use the name immediately.
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 Texas. Swyft Filings can help with your withdrawal from any state where you are foreign qualified.