How To Close An LLC In Alabama? What You Should Know
If you have an Alabama Limited Liability Company that you want to close, it’s important to do so in a way that follows Alabama as set by the Alabama Secretary of State. Otherwise, you and your other LLC members could face ongoing fines and penalties.
That’s why we’ve created this guide to domestic Alabama LLC dissolution filing. It provides step-by-step instructions to make sure you do everything properly with the Alabama Department of State.
So, without further delay, let’s get started.
Read More: Best Registered Agent Services 2023
Can Small Business Owners Close An LLC?
Yes, it’s 100% possible to close an Alabama LLC without facing hefty penalties for doing so. However, there’s a process you need to follow properly when you file articles of dissolution. We’ll cover the steps limited liability companies need to follow in the next section so keep reading to learn more.
That being said, it’s also important to keep in mind that you will need to take care of business debts and pay outstanding taxes for your Alabama corporation as part of this process. Ignoring those responsibilities could get you an IRS account and prevent you from distributing assets after your dissolution form is processed.
How To Dissolve An LLC In Alabama?
Review your operating agreement
The first thing you need to do is take a look at the operating agreement for your Alabama LLC. This governing document may have specific instructions you need to follow before you can proceed with a dissolution filing.
For example, there may be votes that need to take place before the dissolution process can be initiated. You may also have rules for dealing with business licenses, minimum business taxes, and any administrative fees the dissolution process for your Alabama business incurs.
Your business entity should review any dissolution rules its operating agreement may contain and follow them during the entire voluntary dissolution process. Otherwise, any remaining assets your LLC has after paying Alabama taxes and getting tax clearance could be the subject of a lawsuit.
Fill out LLC articles of dissolution
Once you’ve looked at your LLC’s certificate and operating agreement and followed its instructions for a dissolution meeting, then you can begin legal proceedings to voluntarily dissolve your business. The first step is to fill out articles of dissolution.
The dissolution form is relatively straightforward. Simply fill out the information requested by the Alabama Secretary of State. This may include your business activities, information about your final tax return, and your EIN account, among other Alabama law requirements. These may be slightly different for foreign LLCs as well.
Submit your articles of dissolution to the right judge of probate
The more challenging aspect of dissolving your Alabama limited liability company is submitting the form correctly. You need to present your Alabama LLC dissolution form to a judge of probate in the same county that processed the business formation documents. You can do so by mail or in person, but not online.
When you submit your domestic LLC articles of dissolution, you’ll have to pay a filing fee to the Alabama Secretary of State ($100). There will also be a filing fee you pay to the judge of probate. This amount varies based on the county you’re in but will be at least $50.
Finally, your county may or may not offer expedited dissolutions. But you may have to pay an extra $100 to have your final return and a certified copy of your LLC dissolution documents processed faster.
Complete the wind-up process
At this point in the dissolution process, all that’s left to do is complete the wind-up process for your Alabama company. This involves completing any business tasks that your LLC may still have outstanding, including:
- Submitting your required tax returns and IRS form documents to the state and federal government
- Updating your mailing address if you want to conduct business or transact business through a new entity
- Making your final payment to registered agent services if you’ve been using them
- Filing any remaining annual reports your Alabama business may be responsible for
- Paying off business debts and notifying creditors that you’ve filed articles of dissolution with the Alabama Secretary of State
How Long Does It Take To Dissolve An LLC?
Generally, you can expect the Alabama Secretary of State to process your articles of dissolution within 10 days of them being recorded by the judge. However, expedited Alabama LLC dissolution may be available to get your dissolved LLC taken care of faster for an extra filing fee.
What Might Occur If Your LLC Isn’t Properly Closed?
Some states have minimal penalties for businesses that don’t file articles of dissolution and obtain tax clearance. But Alabama isn’t one of them. You really need to follow Alabama law and submit all of the required paperwork to the Alabama Department of State. Otherwise, you’ll face ongoing penalties.
Your Alabama LLC should be paying an unpaid business privilege tax to the Department of Revenue. If you just stop paying this, you’ll owe a penalty of 10% of the amount due by your Alabama LLC or 1% per month until the debt is paid – whichever is greater.
If your limited liability company ignores these requirements, its remaining assets could be at risk. A law firm could seek to use them as collateral until your Alabama business completes the dissolution process by paying what it owes. There is no administrative dissolution of an Alabama business or LLC.
Who To Notify After Closing Your LLC?
Once you’ve completed the dissolution process and obtained a certified copy of the paperwork, your Alabama company may need to notify creditors and debtors of its intention to dissolve. You may also need to file a form with the IRS if you have an EIN account your LLC needs to shut down or have a filing date / effective date IRS form requirement.
Top 2 LLC Services
Your limited liability company can review its governing documents for guidance and submit all of the required paperwork to the Secretary of State on its own. But it can also be helpful to have some assistance with the process – especially if you have a foreign LLC, past-due annual reports, or other unique Alabama LLC issues. These two companies can help.
| ZenBusiness | Northwest Registered Agent | |
| Award | Best Overall | Most Affordable |
| Detail | Read Review | Read Review |
| Link |
ZenBusiness
ZenBusiess can offer a wide variety of business services to your Alabama company. Whether you’re looking for help with dissolution, retaining your business name, or figuring out the right state filing fee to pay, they have resources and experts who can help you do it without running into problems with the Alabama Secretary of State.
Northwest Registered Agent
Northwest is another company that can help your Alabama LLC stay in good standing with the secretary of state. They’re a bit more affordable than ZenBusiness, but don’t quite offer as many business services.
Conclusion
If you want to shut down your Alabama business, it’s important to do so by the rules. Otherwise, your Alabama LLC will face ongoing fees and penalties that could put your assets at risk. This guide contains everything you need to know in order to shut down your Alabama LLC correctly. But you may also want to consider hiring an Alabama LLC professional service provider if you want extra support.
You can close your Alabama LLC by filling out articles of dissolution and submitting them to the judge of probate in the county that handled your original business formation documents. You will also have to pay filing fees in order to proceed.
Yes, you can shut down your business without hiring any outside firms for support. But companies like ZenBusiness and Northwest can provide help if you feel you need it.
Yes, if you don’t file articles of dissolution, your Alabama will face ongoing penalties for unpaid state taxes, which could put the company’s assets at risk of seizure.
You can retain your business name for up to 120 days after closing your Alabama LLC. If you haven’t put the name on another business at that point, then it will become available for public claiming.