To dissolve an LLC in Arizona, you need to authorize the dissolution under your operating agreement, notify creditors, pay off debts and distribute remaining assets, file final federal and state tax returns, cancel your licenses, and file Articles of Termination with the Arizona Corporation Commission (ACC). The ACC filing fee is $35, and the sequence matters: skipping a step can leave members personally exposed to claims that should have been extinguished with the business.
Authorize the Dissolution
Start with your operating agreement. Most agreements set out the events that trigger dissolution and the member vote required to approve it, and those terms control. Some require a unanimous vote; others set a lower threshold. Read the document before doing anything else.
If the agreement is silent, Arizona law fills the gap. Under A.R.S. 29-3701, dissolution happens when a triggering event described in the operating agreement occurs, when the members consent to dissolve, or through a court order.1Arizona Legislature. Arizona Code 29-3701 – Events Causing Dissolution Either way, put the vote or triggering event in writing. You will need that record when you file with the ACC.
Notify Creditors
Once dissolution is authorized, Arizona’s LLC Act requires written notice to every known creditor. Each notice must give a deadline for submitting claims and explain what information the creditor needs to provide and where to send it. Creditors who miss the deadline or ignore the procedures risk having their claims barred.
For creditors you don’t know about, Arizona law lets a dissolved LLC publish a notice of dissolution asking anyone with a claim to come forward.2Arizona Legislature. Arizona Code 29-3705 – Other Claims Against Dissolved Limited Liability Company Publishing in a local newspaper starts a clock for unknown claimants and limits the window for surprise claims later.
Beyond creditors, tell your employees, customers, vendors, and business partners what is happening. Formal notice isn’t required for them, but clear communication heads off confusion about outstanding orders and final invoices.
Pay Debts and Distribute Remaining Assets
After the notices go out, the LLC enters winding up. Arizona law requires the company to pay its debts and obligations, finish any remaining business, and distribute what’s left to the members.3Arizona Legislature. Arizona Code 29-3702 – Winding Up That means paying loans, settling vendor contracts, covering lease obligations, and resolving pending disputes.
Order matters. Creditors are paid before members receive anything. If there are contingent liabilities such as pending litigation, set aside a reserve to cover potential payouts. Only after known and reasonably anticipated debts are handled should members take distributions. The ACC will not accept Articles of Termination until all property and assets have been distributed.4Arizona Corporation Commission. Articles of Termination – General Information
Wrap Up Employee and Contractor Obligations
If the LLC has employees, final pay is time-sensitive. Arizona requires employers to issue final paychecks within seven working days of termination or by the end of the next regular pay period, whichever comes sooner.5Arizona Legislature. Arizona Revised Statutes 23-353 – Payment of Wages of Discharged Employee Missing that deadline is a petty offense under state law.
Federal payroll wrap-up follows. Make final federal tax deposits for withheld income tax, Social Security, and Medicare. File a final Form 941 for the quarter of the last wage payments, check the box on line 17 marking it a final return, and enter the date of the last paycheck.6Internal Revenue Service. Instructions for Form 941 File a final Form 940 for the calendar year and issue W-2s to every employee for the year they received final wages.7Internal Revenue Service. Closing a Business
If you paid any independent contractors $600 or more during the final calendar year, report those payments on Form 1099-NEC.7Internal Revenue Service. Closing a Business Larger employers have another obligation: the federal WARN Act requires businesses with 100 or more employees to give at least 60 calendar days’ written notice before a plant closing that affects 50 or more workers at a single site.8U.S. Department of Labor. Plant Closings and Layoffs
File Final Tax Returns and Get Tax Clearance
Every dissolving LLC files final federal and state returns covering income earned through the dissolution date. The federal return depends on your tax classification. Multi-member LLCs taxed as partnerships file a final Form 1065. Those taxed as corporations file a final Form 1120 or 1120-S. Single-member LLCs report on the owner’s personal return. Check the “final return” box in each case.7Internal Revenue Service. Closing a Business
On the state side, file a final Arizona income tax return through the dissolution date. If your LLC collected transaction privilege tax, file a final TPT return with the Arizona Department of Revenue (ADOR) and cancel the TPT license once that return is on file.9Arizona Department of Revenue. TPT License Fees, Cancellation, and Other Changes
Before you file Articles of Termination, consider applying for a tax clearance certificate from ADOR. Arizona statute requires certain dissolving entities to obtain a certificate showing all state taxes have been paid or secured before the dissolution is finalized.10Arizona Legislature. Arizona Revised Statutes Title 43 Section 43-1151 ADOR offers a Tax Clearance Application specifically for dissolution and withdrawal; expect processing to take roughly 30 business days.11Arizona Department of Revenue. Tax Clearance Application and Certificate of Compliance for Dissolution or Withdrawal Getting clearance protects members from unexpected tax claims after the company ceases to exist.
Cancel Licenses and Permits
Identify every license, permit, and registration the LLC holds and cancel each one with the issuing agency. Leaving active licenses in place can trigger ongoing compliance obligations and fees after the business stops operating. The Arizona Commerce Authority recommends contacting every government office that issued a license, permit, or registration to confirm proper cancellation.12Arizona Commerce Authority. I Am Exiting My Arizona Business
Common items to close out:
- Transaction privilege tax license, canceled through ADOR after the final TPT return.
- Professional licenses issued by state boards for fields such as real estate, contracting, or health care. Some, like the Arizona Registrar of Contractors, cannot be reactivated once cancellation is submitted.13Arizona Registrar of Contractors. License Cancellation Form RC-L-201A
- City and county business or occupational permits, canceled through the local clerk or licensing office.
One item you can cross off entirely: Arizona does not require LLCs to file annual reports, so there is no final annual report to submit.14Arizona Corporation Commission. Business Services FAQs
File Articles of Termination With the ACC
Filing Articles of Termination is the step that officially ends the LLC in Arizona. You can only file after all property and assets have been distributed, which is why it comes near the end of the process.4Arizona Corporation Commission. Articles of Termination – General Information The form asks for the LLC’s exact legal name as it appears in ACC records, matching the spelling, punctuation, and entity designation precisely.
The filing fee is $35 and is nonrefundable.4Arizona Corporation Commission. Articles of Termination – General Information Submit the completed form by mail or deliver it in person to the ACC’s Corporations Division at 1300 W. Washington St. in Phoenix. Payment options include check, money order, or credit card. The ACC does not currently accept online filing for Articles of Termination, so plan for mailing time or a trip to the office. Check every field before submitting; errors cause processing delays and the fee is not refundable.
Deactivate Your EIN
An Employer Identification Number is permanent. The IRS does not cancel EINs, but it will deactivate the account so it is no longer active. Before requesting deactivation, file all outstanding tax returns and pay any taxes owed.15Internal Revenue Service. If You No Longer Need Your EIN
Send a letter to the IRS that includes the LLC’s legal name, EIN, business address, a copy of the EIN assignment notice if you still have it, and the reason for closing the account. Mail it to one of these addresses:15Internal 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
Close Financial Accounts and Keep Records
Once debts are paid, assets distributed, and termination filed, close the LLC’s bank accounts, credit lines, and merchant processing accounts. Notify each financial institution that the LLC has dissolved, and transfer or withdraw remaining funds.
Keep records after dissolution. Arizona law requires LLCs to maintain copies of tax returns and financial statements for at least the three most recent years.16Arizona Legislature. Arizona Code 29-3410 – Records to Be Kept In practice, holding on to key documents for at least seven years is safer, given that the IRS can audit returns for up to six years in certain situations. Store your Articles of Termination, final tax returns, creditor correspondence, dissolution vote records, and bank statements in a secure location. If a creditor or agency comes asking questions later, those records are your proof that everything was handled properly.