Closing your Wyoming limited liability company (LLC) will involve a variety of tasks. Among the most important are what is known as dissolving and winding up the business.
Your LLC is registered with the State of Wyoming. Officially ending its existence as a state-registered business entity and putting it beyond the reach of creditors begins with a formal process called “dissolution.” While an LLC may be involuntarily dissolved through a court order, here we are concerned with voluntary dissolution by the LLC members.
In order to voluntarily dissolve your LLC, you first should look to the company’s formational documents—the articles of organization and operating agreement. In most cases, one of those two documents will contain a section with rules for how to dissolve the company. Typically the rules will require a vote of the LLC members on a resolution to dissolve and a requirement that some percentage of members vote in favor of the resolution. Make sure you follow any specific procedural requirements that may be part of the dissolution rules, such as setting a specific time to meet and vote and giving advance notice to all members regarding the meeting.
Also, regardless of whether your articles of organization or operating agreement contain any dissolution provisions, Wyoming’s LLC Act allows for an alternative method to voluntarily dissolve an LLC: consent of all LLC members.
For either approach to dissolution of your LLC—relying on rules in formational documents or unanimous member consent—you should make sure to record the decision to approve the dissolution in the official minutes of the dissolution meeting or on a written consent form.
Following dissolution, your LLC continues to exist only for the purpose of taking care of certain final matters that are known as “winding up” the company. You will probably designate one or more LLC members or managers to handle the winding up.
Under Wyoming’s LLC Act, key winding up tasks include:
When it comes to the last two listed items, discharging liabilities and making distributions to creditors and members, you are required to make payments in a particular order. First, you must pay creditors, including LLC members who are creditors. Note that it is particularly important that you pay all outstanding taxes. You should then distribute any remaining assets to LLC members (a) to return all contributions to the company not previously returned; and then (b) unless your operating agreement provides otherwise, any remainder in equal shares to current and dissociated members. (Wyoming also has an unusual statutory provision that allows for the possibility that distributions to members might be handled differently based on an authorized LLC representative’s representations to the IRS.)
One other key task, generally considered part of winding up, is giving notice to creditors and other claimants of your LLC's dissolution. Giving notice is optional. However, doing so will help limit your liability and also allow you to more safely make final distributions to members.
Under Wyoming law, one way to give notice is by sending a written document directly to known claimants. Proper written notice must:
You also may give notice to other (unknown) claimants by publishing in a newspaper. As with sending direct notice to individual claimants, there are specific rules for giving notice through publication. Generally speaking, claimants have three years after the date of newspaper publication to bring a claim.
There can be certain advantages to giving direct written notice to individual claimants. In any case, if you choose to give claimants notice of your LLC’s dissolution, you should strongly consider getting assistance from a business attorney.
After dissolving your LLC, you should files articles of dissolution with the Secretary of State (“SOS”). While Wyoming law does not require you to file this type of final document, instead stating that an LLC “may” terminate its existence in this manner, it is generally advisable to file articles of dissolution. (If you have specific questions about whether to file, you should contact a local attorney.)
The articles of dissolution need to contain only the most basic information about your dissolved LLC, such as its name, a statement that the company is dissolved, a date, and a signature.
There is a $50 fee to file articles of dissolution. Your filing usually will be processed within one week. An articles of dissolution form is available for download from the SOS website.
Wyoming does not require that you obtain tax clearance before dissolving your LLC.
For federal tax purposes, check the “final return” box on your IRS Form 1065 if your LLC is classified as a partnership for tax purposes, or IRS Form 1120 if your LLC is classified as a corporation for tax purposes.
Is your LLC registered or qualified to do business in other states? If so, you must file separate forms to terminate your right to conduct business in those states. Depending on the states involved, the form might be called a termination of registration, certificate of termination of existence, application of withdrawal, or certificate of surrender of right to transact business. Failure to file the additional termination forms means you’ll continue to be liable for annual report fees and minimum business taxes.
You can find additional information, such as forms, mailing addresses, and filing fees, on the SOS website.
For information on dissolving and winding up LLCs formed in other states, check Nolo’s 50-state series on dissolving LLCs.
Final Advice: Dissolving and winding up your LLC is only one piece of the process of closing your business. For further, general guidance on many of the other steps involved, check Nolo’s 20-point checklist for closing a business and the Nolo article on what you need to know about closing a business.