Closing your Missouri 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 Missouri. Officially ending its existence as a state-registered business entity and, by extension, putting it beyond the reach of creditors, begins with a formal process called "dissolution." While an LLC may be involuntarily dissolved through a court decree, this articles covers 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 the 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.
Regardless of whether your articles of organization or operating agreement contain dissolution provisions, Missouri's LLC Act provides an alternative method to voluntarily dissolve an LLC that anyone can use. These rules allow you to dissolve an LLC by obtaining the written consent of all its members.
Whether you dissolve the LLC based on rules in formational documents or by unanimous written consent, you should make sure to record the decision to approve the resolution in the official minutes of the dissolution meeting or on a written consent form.
As soon as possible after you have voted to dissolve your LLC, you must file a notice of winding up with the Missouri Secretary of State ("SOS"). The notice of winding up will contain basic information about your LLC, such as:
There is a $25 fee to file the notice.
Be aware that your business name will become available for use by others once your LLC is dissolved.
Following the vote to dissolve your LLC and filing of the notice of winding up, the company continues to exist for the purpose of taking care of certain final matters that, collectively, are known as "winding up" the company. You will probably designate one or more LLC members or managers to handle the winding up.
Under Missouri law, key winding up tasks include:
Under Missouri's LLC Act, you are required to apply assets in a particular order. First, you must pay creditors, including LLC members who are creditors, to the extent permitted by law. It is particularly important that you pay all outstanding taxes. Next, unless your operating agreement provides otherwise, you should make distributions to current and former LLC members based, for example, on a member's withdrawal from the company or on a previous agreement of members to make a distribution. Finally, if any assets still remain, you should make distributions to members (a) in proportion to their contributions to the company; and then (b) in equal shares, (unless your operating agreement provides otherwise).
One other key task, generally considered part of winding up, is giving notice of your LLC's dissolution to creditors and other claimants. 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 Missouri law, one way to give notice is by sending a written document directly to known claimants after the effective date of dissolution. Proper written notice must:
You also may give notice to unknown claimants by publishing in three different newspapers including the Missouri Register. As with sending direct notice to individual claimants, there are specific rules for giving notice through publication, including specific items that the published notice must contain. 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.
When all of the remaining property and assets of your LLC have been properly applied and distributed, Missouri law requires that you file articles of termination with the Secretary of State. The articles of termination contain information similar to the notice of winding up, including:
There is a $25 fee to file the articles of termination.
Note on Tax Clearance
Unlike some other states, Missouri does not require you to get tax clearance from the Department of Revenue before you can dissolve your LLC.
You can find additional information, including forms for the notice of winding up and articles of termination, mailing addresses, and filing fees on the Secretary of State website.
For information on dissolving and winding up LLCs formed in other states, check Nolo's 50-state series on dissolving LLCs.
Note: 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.