By The Wyoming LLC Attorney Team
Sep 01, 2022Dissolving an LLC in New Mexico involves voting to dissolve, filing dissolution documents with a fee, canceling permits and licenses, settling debts, and distributing assets. After dissolution, you'll receive a certificate of termination and must file for tax clearance. Following the proper steps ensures you won't be liable for the business.
Forming an LLC requires decisions, paperwork, and time, just like forming any business in the United States. Limited liability companies (LLCs) are a type of business structure that offers a separation between personal and business assets, providing asset protection.
After the LLC is established, LLC owners are not personally liable for a company's debts or liabilities. LLCs offer a hybrid model of benefits, offering both that of a corporation and a partnership or sole proprietorship. This structure includes the drafting of an operating agreement, understanding specific requirements, managing taxes effectively, and the necessity of filing an annual report. Opting for a single member LLC is also a consideration for those looking to maintain simplicity while still enjoying the benefits of an LLC.
If you no longer want to operate your business, you can dissolve your LLC. This essentially means canceling the business. Although it is a simple process, you will need to take specific steps in order to dissolve the LLC. This is important because otherwise, you may lose your liability protection.
The act of dissolving an LLC is dissolution. It generally occurs when the business purpose of the LLC is completed, or it is no longer making money. LLC members may also decide to dissolve an LLC if they cannot agree on decisions for the business.
As mentioned, generally the act of dissolution occurs when an LLC no longer wishes to operate. There are cases where the business purpose of an LLC is completed. If this is the case, it would have originally been filed as an LLC with a limited amount of time.
Although dissolution is most common when a company is going out of business, it can also be because the LLC is no longer generating revenue. Other reasons for dissolution may be due to members being unable to come together on decisions, or because they are ready to retire.
Sometimes an LLC may be at risk for involuntary dissolution this can be due to not paying taxes or following compliance laws.
Dissolving an LLC is never the goal but it does happen for various reasons. Some good, some bad. Either way, it’s important that you make it a smooth process. Here’s how to dissolve a New Mexico LLC successfully.
An LLC is different from a corporation in that all LLC members must agree to dissolve an LLC before it happens. This means that voting is the first step in the dissolution of your company. The vote should follow the right procedure that is listed in the article of organization. These are written when the LLC is formed.
The state of New Mexico has specific dissolution documents that must be completed and filed with the state. In New Mexico, there is a required $25 filing fee, but same-day processing requires an additional $300 fee.
Most businesses require permits and licenses to operate. You will need to cancel your permits and licenses in order to avoid the state assuming you are still in business and looking for compliance fees.
One of the final stages of dissolving an LLC involves paying off debts and canceling your EIN. This is essential because it dissociates you from any business fees or legal ties. When an LLC dissolves it is also important to distribute the assets of the business. This may include selling equipment or property and inventory. Creditors will also need to be notified.
When you dissolve an LLC it can take up to fifteen days to process, but typically only takes 3 to 5 days. After it is dissolved you will receive a certificate of termination. Then you will need to file Form 05-359, Request for Certificate of Account Status, which typically takes 4-6 weeks to process. Finally, you will receive your tax clearance.
You can reopen an LLC, but you will need to basically follow the same steps you took to start the LLC in the first place. As long as you follow all the required procedures dissolving your LLC, you will not be liable for anything related to the business. If you're ready to dissolve your New Mexico LLC and need legal support, please reach out by completing the provided form or calling +1 (307) 683-0983.