What's up guys,
Hey, it's Clint Coons here.
And in this video, we're going to discuss five important steps when it comes
to dissolving or closing down your limited liability company.
Okay, let's get started.
So here's the first and most important step.
If your LLC has real estate inside of it, first thing you need to do
number one, is transfer
out the real estate.
You got to get that out of the LLC before you close it
because if you close that LLC,
you shut it down and there's real estate left inside of it.
You're going to cloud title to your property.
That means it's going to make it
difficult for you to sell that property or transfer it in the future.
I've seen this happen time and time again to real estate investors.
They shut down an LLC.
They didn't realize they still had a piece of property into do it
and just really binds up their deal when they're trying to sell.
All right. Number two,
okay.
Pay No.
One, creditors. Okay.
So if you know of any creditors
of your limited liability company,
make sure you get them paid right away before you shut that entity down.
And so do a reasonable search of creditors.
You know, just show your due diligence that you went through,
you know, all your statements or whatever it may be, and you paid all of them.
So that brings us to step number three.
After you've done that, you want to close your bank account.
Now, this can be an issue for people.
I've had situations where people have called me up,
they've shut down their LLC, dissolved it with the state,
forgot to close their bank account.
Now they can't close the bank account out because the LLC has been dissolved
or the bank what they'll do is they'll send the money
to the LLC name which is closed
and it kind of just gets caught in this circular position
where you don't have an LLC set up with that name.
So you have to go open up a new LLC in a different state
with the same name, or possibly with the same state.
Depends if you can do it or not, just to deposit that money to pull it back out.
So make sure you close your bank account. All right.
The fourth thing here, follow
your operating agreement.
You get OPG there.
So there are steps
that you must go through to shut down your LLC.
Now, it depends on your operating agreement.
It may state that you have a vote of the members and it requires unanimous
approval or majority approval, or maybe it needs to be written.
You need to have meeting minutes to back it up.
I don't know what
your operating agreement states, but you better follow that procedure.
And here's why this is really important.
This stuff's important news because if you shut your LLC down
and then a creditor comes back at a later date
and they want to bring a claim against your company
and they want to look through it and hold you personally liable.
They can do it if you haven't followed the proper formalities to shut
that limited liability company down, namely being if the LLC states
that in order to shut it
down, you have to have unanimous written approval and you don't do that,
then that would be a way for a creditor to look through that limited
liability company and bring you in personally.
All right.
So that means the fifth step. That's the most important here.
One of the most important is
to file articles
of dissolution
case.
You want to file articles of dissolution to close that down.
So what that means is you file it with the state.
Typically it's going to be 100 to $300 to dissolve out your LLC.
So you're going to shut that business down with the state.
Now, by doing that, if you gone through this list right here,
then you're probably going to be pretty safe and not have to worry
about prior creditors of the LLC coming back against you
because you can document, you went through and you did all the necessary
formalities to shut your company down.
If you're setting up LLC to flip property, if you're setting up LLC to buy
real estate, you want to make sure that after your deals are done
and you no longer have a use for that limited liability company,
that there isn't an angle for a creditor to come through a dissolved LLC
and hold you personally liable.
Now, one of the
things that I didn't mention here is if your LLC is an active business
and you have a retirement plan like a401k,
if you have a41k plan, then before you hit
step five, you want to make sure you shut that 401 k down.
Otherwise, it's going to create problems for you with Arisa.
And oh, by the way, after that's all said and done, you want to close out your in
with the IRS as well, or if you have the entity
that is required to file a tax return, then you would file a final tax return.
And so let your CPA know that if your entity has been closed out,
that this is the final return, that you'll be filing for that entity
and they'll form the IRS when they send in that return.
Well, guys, that's it.
Five, five important steps you got to go through
when it comes to shutting down an LLC to make sure
that you don't have personal liability for any creditors
and claims that are later brought after that company is closed.
Hey, if you want to learn more, we want to get a strategy session
set up with Anderson. Be sure to look in the show notes.
I have a link there.
You can click on and schedule a strategy session
with someone here at Anderson
or hey, if you just like the videos, hit the like button or the subscribe
take care.