How To Dissolve An LLC In Texas

Will my Texas LLC dissolve if I stop paying taxes?

That's a question almost anyone closing a Texas business asks at some point. It sounds reasonable, but the answer is no.

Skipping tax payments doesn't close your LLC. It just adds penalties and interest to what you already owe the state. Eventually, the state can revoke your LLC instead of dissolving it, and that's not the same thing. [2]

Closing an LLC the right way takes more than stopping operations. You need to wind up the company's affairs, settle your account with the Comptroller, and file a Certificate of Termination under the Business Organizations Code before the state recognizes the LLC as dissolved.

Below is the exact order of steps, the forms you need, and what it costs to close your LLC properly.

Texas LLC Dissolution Requirements

What It Means To Dissolve An LLC In Texas

Dissolving an LLC means you are ending its legal existence with the state. Once it's done, your LLC can no longer sign contracts or take on new business.

Texas recognizes two paths to dissolution:

• Voluntary dissolution happens when the members choose to close the business.
• Involuntary dissolution happens when the state ends your LLC's existence for you, usually because you missed a franchise tax filing or lost your registered agent.

This guide focuses on voluntary dissolution, since that's the path most business owners are looking for.

Step 1: Get Approval From LLC Members

Start by reviewing your operating agreement. It may explain how many members must approve the decision to dissolve the LLC and how the vote should be conducted.

If your operating agreement doesn't explain how to approve a dissolution, the default rules under the Texas Business Organizations Code apply. Many LLCs require member approval under those statutory rules.

Document the decision in the meeting minutes if the members vote during a meeting. If they approve the dissolution without holding a meeting, record the decision in a written consent or dissolution resolution. You do not submit this internal approval document to the state, but you should keep it with the LLC’s records as evidence that the dissolution was properly authorized.

Step 2: Wind Up Your LLC's Business Affairs

Winding up means tying up the loose ends of your business before you file with the state. This requirement comes from Chapter 11 of the Texas Business Organizations Code, the state law that governs how LLCs wind up and terminate [2].

During the wind-up, you should:

• Stop taking on new business, except what's needed to close out existing work
• Notify creditors, vendors, and any known claimants that the LLC is closing
• Pay off debts and settle outstanding obligations
• Sell off business assets if needed
• Distribute any remaining money or property to the members according to your operating agreement
• Cancel local business licenses and permits

Keep records of everything you do during this stage. If a creditor or former client raises an issue later, this paperwork protects the members from personal liability.

Step 3: Get Your Certificate Of Account Status From The Comptroller

Before the Secretary of State will accept your termination paperwork, you need proof from the Texas Comptroller that your LLC is currently on state taxes. This proof involves two forms:

• Form 05-359 is the request you submit to the Comptroller, asking for your tax clearance.
• Form 05-305 is the actual Certificate of Account Status the Comptroller sends back once your account checks out. This is the document you attach to your Certificate of Termination.

To get your Form 05-305, you first need to:

• File any outstanding franchise tax reports and Public or Ownership Information Reports
• File a final franchise tax report covering the period up to a date within 60 days of your planned termination date [3]
• Pay any tax, penalty, or interest owed
• Close any other open tax accounts with the Comptroller's office

Once your account is current, request your Form 05-305 through the Comptroller's Webfile system, or mail in Form 05-359 if your entity doesn't qualify for Webfile [4]. Form 05-305 is only valid through December 31 of the year it's issued, so don't request it too far ahead of your filing.

Turnaround time varies. Webfile requests can be issued right away once everything checks out, while mailed requests can take several weeks, especially close to the May 15 franchise tax deadline.

Step 4: File Your Certificate Of Termination With The Secretary Of State

This is the filing that officially ends your LLC's existence. In Texas, it's called a Certificate of Termination, and it's filed as Form 651 [2].

You'll need to include:

• Your LLC's legal name and file number
• The date your LLC was formed
• The names and addresses of your governing members or managers
• The event requiring winding up and termination
• A statement confirming you've completed the wind-up process
• Your Certificate of Account Status from the Comptroller

You can submit it online through SOSDirect, or mail two signed copies to the Secretary of State's office in Austin. Processing times vary depending on filing method and current Secretary of State workloads.

You can also set an effective date for the termination. It can be the date you file, or any date within 90 days after you sign the form.

Step 5: Close Your Accounts With The IRS

State termination handles any paperwork with Texas. You still have federal steps to close out with the IRS.

File a final federal tax return for the year your LLC closes, and check the "final return" box on the form [5]. If your LLC has employees, you'll also need to file final payroll tax forms and issue final W-2s.

Your EIN itself never gets reused or canceled the way a Social Security number would, but you can formally close your business account with the IRS by sending a letter that includes your LLC's legal name, EIN, address, and the reason for closing [6]. This tells the IRS to stop expecting future filings tied to that number.

Step 6: File Additional Forms If You Are A Foreign LLC

If your Texas LLC is also registered to do business in another state, or if your LLC was formed in another state and only registered in Texas, you'll need one more filing depending on your situation.

If your LLC is still active in another state but you want to stop doing business in Texas, file Form 608, Certificate of Withdrawal. If your LLC has already been dissolved in the state where it was originally formed, file Form 612, Termination of Registration, along with proof of that dissolution.

What Happens If You Do Not Dissolve Your LLC The Right Way

If you simply stop operating without filing a Certificate of Termination, your LLC stays active on Texas's records. Franchise tax reports keep coming due, and unpaid reports lead to penalties and accumulating interest.

The state can eventually dissolve your LLC on its own through involuntary termination, but that process happens on the state's timeline, not yours, and it doesn't erase debts or reports that piled up before it. Properly filing your own termination keeps you in control of the process and the timeline.

Can A Dissolved Texas LLC Be Reinstated

Yes. As of a 2023 change to the Texas Business Organizations Code, there is no longer a deadline to reinstate an LLC that was voluntarily terminated [1].

If your LLC was involuntarily terminated by the state, you have three years to reinstate it and have the reinstatement relate back to the date of termination. This means the LLC is generally treated as though its existence was never interrupted. After the three-year period, you may still be able to reinstate the LLC, but it won't be treated as having existed continuously during the time it was terminated.

Either way, reinstatement uses Form 811 and requires a tax clearance letter from the Comptroller, called Form 05-377, showing your account is current [1]. You request it using Form 05-391.

Need Help Closing Your Business

Dissolving an LLC involves a specific order of steps, and getting that order wrong is the most common reason filings get delayed. Swyft Filings has helped over 600,000 businesses with formation and closure. We can dissolve your LLC online so you don't have to track down every form yourself.

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Bibliography

• [1] Texas Secretary of State. Terminations and Reinstatements FAQ. Accessed on July 13, 2026.
• [2] Texas Secretary of State. Form 651, Certificate of Termination of a Domestic Entity. Accessed on July 13, 2026.
• [3] Texas Comptroller of Public Accounts. Reinstating or Terminating a Business. Accessed on July 13, 2026.
• [4] Texas Comptroller of Public Accounts. Requesting Tax Certificates and Tax Clearance Letters. Accessed on July 13, 2026.
• [5] Internal Revenue Service. Closing a Business. Accessed on July 13, 2026.
• [6] Internal Revenue Service. What business owners need to do when closing their doors for good. Accessed on July 13, 2026.