I'm not sure how to explain this without sounding like an idiot. I run a very small bookkeeping side thing (just me, a few clients). Last month I was filling out some paperwork online and somehow ended up forming an LLC for it. I thought I was requesting a business license or something like that. I got the confirmation and the articles of organization in the mail. I don't actually need an LLC. I'm a sole proprietor and that's fine for what I do. What do I do now? Can I just ignore it? Do I have to dissolve it? I'm worried about fees and taxes I wasn't planning on.
LLC
I created an LLC by mistake
You should check your state's requirements first. Ignoring it won't make it go away. Most states require an annual report or franchise fee, and missing those can lead to penalties or administrative dissolution. That's usually more expensive than just dissolving it properly.
This sort of thing happens more than you'd think. Was it a registered agent service or a filing website that did it? Some of those have confusing upsells. Anyway, dissolving is usually straightforward, but you'll need to file the right form with the secretary of state.
Don't ignore it. The annual fees and potential fines add up fast.
Also, the IRS treats a single-member LLC as a disregarded entity by default, so it shouldn't change your federal taxes. But your state might have different rules or minimum taxes. Check with a CPA if you're unsure.
I made a similar mistake with a DBA filing once. The secretary of state website was not clear at all. I ended up calling their office and they walked me through the dissolution form. Might be worth a phone call.
Can I ask why you don't want it? An LLC gives you liability protection for your bookkeeping business. It might actually be a good thing to keep, even if you didn't plan on it.
That's a fair question but for a side gig with just a few clients, the cost and paperwork might not be worth it. Plus the OP said they're fine as a sole proprietor. Not everyone needs an LLC.
Also, bookkeeping can carry some liability risk, but an LLC doesn't protect you from professional errors anyway. So it's not a clear win.
What state are you in? The dissolution process and fees vary a lot. In some states it's a simple online form and a small fee, in others you nsed to publish a notice or get tax clearance first.
I'd second the suggestion to look into whether you have any ongoing obligations like a registered agent. If you used a service, you might need to cancel that separately or you'll keep getting billed.
Thanks, everyone. I'm in Oregon, if that helps. I did use one of those online filing services, and I think they signed me up for a registered agent subscription too. I'll check that and then look into dissolving. I appreciate the reassurance that this isn't a huge disaster.
Oregon's secretary of state website has a business registry search and the dissolution form is pretty easy to find. Just make sure you're logged into the right account. And definitely cancel that registered agent subscription or they'll auto-renew.