My LLC is registered in Colorado and the annual report fee is coming up in about six weeks. I haven't really used the business for anything in over a year, no revenue, no clients, just a placeholder really. I want to close it properly so I don't keep paying. I looked at the state website but I'm not sure if I should just let it go delinquent or file articles of dissolution. Also, do I have to tell the IRS anything? Any tips from people who have done this would be great. I don't want to mess it up and get fined later.
LLC dissolution
I want to close my LLC before another annual fee becomes due
Don't just let it go delinquent. That can lead to administrative dissolution and sometimes penalties. File the articles of dissolution with the Colorado Secretary of State. It's usually a simple form and a small fee. Once that's done, you you're clear at the state level.
I closed an LLC in a different state last year. The state part was straightforward, but the IRS part confused me. Do you have any employees or did you elect S-corp status? If not, it might just be a matter of filing a final tax return and checking the dissolution box. I'd double-check with a tax person though.
following. I'm in a similar spot with a Wyoming LLC. Curious what others say about The IRS side.
Agree with plainsight42. Also, after you dissolve, make sure you close any business bank accounts and cancel any local licenses or permits. I forgot about a city business license and got a small bill months later. Nothing major but annoying. The state dissolution is the main thiing.
Colorado's annual report fee is due the end of the month of your anniversary. If you dissolve befoore that date, you shouldn't owe it. The SOS website has a checklist for dissolution. It's not too bad if you have no assets or debts. Just follow it.
One more thing: if you have no assets, you might not need to do a formal asset distribution. But if you do have a bank account with a balance, empty it first. Also, the IRS may require you to file a final return for the year of dissolution. For a single-member LLC, that's usually just your personal return with a Schedule C. But if you elected corporate status, it's different. I'm not a pro, just going off memory.
Yeah, and if you're a single-member LLC with no employees, you might not need an EIN, but if you have one, you can close it with the IRS by sending a letter. Not strictly required but cleaner. I did that for mine.
Thanks for the info. I didn't realize the IRS part could be that simple. I'll look into the final return thing.
If you're unsure, calling the Colorado SOS is actually helpful. I called when I dissolved mine and they walked me through the online form. Saved me from missing something.