To dissolve a single-member LLC in NY, you sign a written consent authorizing dissolution, wind up the company’s debts and assets, settle your state and federal tax accounts, and file Articles of Dissolution with the New York Department of State along with a $60 filing fee. Skip any of those steps and the LLC stays on the state’s books, generating filing obligations and potential penalties long after you thought you had closed it.
Sign a Written Consent to Dissolve
New York’s Limited Liability Company Law allows voluntary dissolution when the members vote or consent in writing.1New York State Senate. New York Limited Liability Company Law 701 – Dissolution With one member, that is a document you sign stating that you have decided to dissolve the company. No meeting, no vote count, but the paperwork still matters. It becomes part of the LLC’s permanent records and marks the official start of the winding-up period.
Read your operating agreement before you sign. If it lays out a specific dissolution procedure, a triggering event, or a set dissolution date, those provisions control. Many single-member operating agreements say nothing about it, in which case the statute’s default rules apply.1New York State Senate. New York Limited Liability Company Law 701 – Dissolution
Wind Up the Business
Once you authorize dissolution, the LLC enters the winding-up phase. State law gives you broad authority during this period to sell property, pay debts, defend or bring lawsuits, and distribute what remains.2New York State Senate. New York Limited Liability Company Law 703 – Winding Up Depending on how much the LLC owns and owes, this can take weeks or months.
Pay Creditors Before Yourself
The order of payment matters. New York law requires that creditors be paid first, including any member who is also a creditor, and only then can remaining assets go to the members.3New York State Senate. New York Limited Liability Company Law 704 – Distribution of Assets Pulling money out for yourself before every outstanding debt, loan, vendor bill, and contractual obligation is settled can expose you personally to those unpaid amounts. That defeats the point of having the LLC.
Practical Closing Tasks
Liquidating usually means selling off inventory and equipment, then using the proceeds to pay what the company owes. Close the business bank accounts, cancel company credit cards, and terminate lines of credit once balances are resolved. If the LLC has contracts with ongoing obligations, negotiate an early termination or run out the term before you file the dissolution paperwork. Anything left hanging can follow you after the LLC ceases to exist.
Settle Your New York Tax Accounts
One point trips up business owners who have worked with corporations before: unlike New York corporations, LLCs do not need written tax clearance from the New York Department of Taxation and Finance before filing articles of dissolution.4New York State Department of Taxation and Finance. Instructions for Voluntary Dissolution of a New York Corporation You still owe the taxes, though. They do not disappear when the LLC dissolves.
File all final business tax returns with the state and pay any outstanding amounts.5New York State Department of Taxation and Finance. Close or End a Business If you had employees, file a final Form NYS-45. If you collected sales tax, file a final sales tax return and destroy the Certificate of Authority that let you collect it.6New York State Department of Taxation and Finance. Amending or Surrendering a Certificate of Authority Keep filing sales tax returns on time until you actually stop doing business, even zero-dollar ones. Missing them triggers penalties and collection activity.
File the Articles of Dissolution
The Articles of Dissolution must be filed with the New York Department of State within 90 days after dissolution is authorized and winding up begins.7New York State Senate. New York Limited Liability Company Law 705 – Articles of Dissolution The form is the Articles of Dissolution of a Domestic Limited Liability Company, available from the Department of State as a fillable PDF.8New York State Department of State. Articles of Dissolution of Domestic Limited Liability Company
The form asks for three things: the exact legal name of the LLC as it appears in state records (with the original name if it was ever changed), the date the articles of organization were originally filed, and the reason for dissolution. For a single-member LLC voluntarily closing, check the box for vote or written consent of the members. The name and formation date must match Department of State records exactly, or the filing will be rejected.9New York Department of State. Articles of Dissolution for Domestic Limited Liability Companies If you are unsure of the formation date, search the Department of State’s online entity database before you submit.
Fees and Processing Times
The filing fee is $60, payable by check or money order to the “Department of State.”9New York Department of State. Articles of Dissolution for Domestic Limited Liability Companies You can submit by mail or in person at the Albany office. Expedited processing is available for an additional fee:
- 24-hour processing: $25
- Same-day processing: $75
- Two-hour processing: $150
Once the Department of State processes the filing, cancellation of your articles of organization takes effect immediately, and the state issues a filing receipt as confirmation.7New York State Senate. New York Limited Liability Company Law 705 – Articles of Dissolution The LLC’s name becomes available for someone else to register. You can still be held liable for obligations that arose during the winding-up period.9New York Department of State. Articles of Dissolution for Domestic Limited Liability Companies
Close Federal Accounts With the IRS
After the state processes the dissolution, tie things off with the IRS. File a final federal tax return for the year you close the business and check the “final return” box near the top of the return.10Internal Revenue Service. Closing a Business For most single-member LLCs taxed as disregarded entities, that means reporting the year’s income and expenses on your personal Schedule C and marking it as the last one.
Then deactivate the LLC’s Employer Identification Number. The IRS cannot technically cancel an EIN, but it will deactivate the number so it no longer ties to an active business. Send a letter that includes the LLC’s legal name, EIN, business address, the EIN assignment notice if you still have it, and the reason for deactivating. Mail the letter to one of these addresses:11Internal Revenue Service. If You No Longer Need Your EIN
- Internal Revenue Service, MS 6055, Kansas City, MO 64108
- Internal Revenue Service, MS 6273, Ogden, UT 84201
The IRS will not deactivate the EIN until all outstanding tax returns are filed and all taxes owed are paid, so handle the final return first.11Internal Revenue Service. If You No Longer Need Your EIN
Cancel Local Licenses and Permits
Do not overlook local and industry-specific licenses. If the LLC holds business licenses, professional permits, or registrations from city or county agencies, cancel them. Some jurisdictions charge renewal fees automatically, and you can end up owing money on a license you forgot to surrender for a business that no longer exists. This is common with local business certificates issued by New York City or county clerks.
What Happens if You Never Formally Dissolve
Walking away without filing Articles of Dissolution is one of the more expensive mistakes a small business owner can make. The LLC stays active on the Department of State’s records indefinitely. New York requires every domestic LLC to file a biennial statement, and a company that fails to file is flagged as past due. That status appears on any certificate of status the state issues and can interfere with other business transactions.12New York Department of State. Biennial Statements for Business Corporations and Limited Liability Companies
Tax filings keep piling up too. If you collected sales tax and never surrendered your Certificate of Authority, the state expects you to keep filing sales tax returns.6New York State Department of Taxation and Finance. Amending or Surrendering a Certificate of Authority Penalties for unfiled returns accumulate whether or not you owe any tax. Formally dissolving costs $60 and some paperwork. Not dissolving costs more over time.
Keep Your Records After Dissolution
Dissolving does not mean you can shred everything. The IRS can audit returns for at least three years after filing, and the window extends to six years if more than 25 percent of gross income went unreported. Records tied to a bad debt deduction or worthless securities loss should be kept for seven years. Employment tax records should be kept for at least four years after the tax was due or paid, whichever is later.13Internal Revenue Service. How Long Should I Keep Records?
At a minimum, hold onto your final federal and state tax returns, the written consent authorizing dissolution, the filed Articles of Dissolution and filing receipt, bank statements, and records of asset sales or creditor payments made during winding up. If the LLC sold or disposed of property where you need to calculate gain or loss, keep those records until the limitations period expires for the year of disposal.13Internal Revenue Service. How Long Should I Keep Records? Seven years from your final return filing date is a safe baseline for most dissolved businesses.