How to Dissolve an LLC in Arkansas: Approval, Filings, and Taxes

To dissolve an LLC in Arkansas, the members vote to close the company, wind up its business and pay its debts, notify creditors, file a Final Franchise Tax Report paying at least the $150 minimum, and file a Statement of Dissolution (Form LL-04) with the Secretary of State for $45 online or $50 by mail. Federal tax accounts and business licenses have to be closed separately. Miss a step and you can end up personally exposed to tax bills or creditor claims long after you thought the company was gone.

Get Member Approval First

Dissolution begins with the members, not the state. If your LLC has an operating agreement, read it before anything else. Most agreements set the voting threshold, whether the decision happens at a meeting or by written consent, and any notice the members are owed. Follow that procedure exactly. Skipping steps here gives a dissatisfied member grounds to challenge the dissolution later.

If the operating agreement is silent, or you never adopted one, the Arkansas Revised Uniform Limited Liability Company Act fills the gap. Dissolution can be triggered by the consent of all members or by the members holding the required majority interest, depending on whether the LLC is member-managed or manager-managed.¹ However the vote happens, put it in writing. A signed resolution stating the date, the members voting, and the outcome protects everyone if the decision is ever questioned.

Wind Up the Business and Pay Debts in the Right Order

After the vote, the LLC enters what Arkansas law calls winding up. The company stops normal operations and exists only to close out its affairs: paying debts, finishing pending business, and distributing whatever is left to the members.¹ The sequence is not optional. Creditors are paid first; members are paid last. Distributing assets to members before debts are settled can pull members into personal liability for those unpaid debts.

The LLC keeps enough legal power during winding up to get the job done. It can still sue and be sued, sell property, and settle disputes.¹ Once creditors are paid, remaining assets go to members according to the operating agreement, or, in its absence, in proportion to ownership interests. Keep a paper trail of every payment. You want records showing creditors were paid before any member received a distribution.

Cut Off Creditor Claims by Sending Notice

This step is optional, and it is also where most people leave themselves exposed. Arkansas gives you a way to force creditor claims into a hard deadline, but only if you actually send the notices.

Known Creditors

For anyone you already know might have a claim, send a written notice of dissolution. Under Arkansas Code 4-38-704, the notice has to describe what information the creditor must submit, give a mailing address, set a deadline of at least 120 days from receipt, and state that the claim is barred if not received by that deadline. Miss the deadline and the claim is barred. If you receive a claim and reject it, a follow-up notice starts a 90-day window for the creditor to sue; if they don’t, that claim is barred too.²

Unknown Creditors

For creditors you don’t know about, publish a notice of dissolution in a newspaper of general circulation in the county where the LLC had its principal office. The notice should describe what a claim must include and where to send it. Claims not filed within the statutory window are barred. Skipping this step leaves the door open for unknown creditors to surface later with valid claims against former members.

File the Final Franchise Tax Report

Arkansas franchise tax doesn’t stop just because you’ve decided to close. The Secretary of State will reject your dissolution filing unless a Final Franchise Tax Report is on file.³

The report requires payment of any unpaid franchise tax for the prior calendar year plus the minimum franchise tax for the dissolution year. For LLCs, the minimum is $150.³ Watch out if your LLC has been inactive: franchise tax continues to accrue even for revoked businesses until the entity is formally dissolved, withdrawn, or merged.⁴ You may owe back taxes before the state will let you dissolve. The form is on the Secretary of State’s website.

File the Statement of Dissolution With the Secretary of State

With the franchise tax paid, file Form LL-04, the Statement of Dissolution for Limited Liability Company.⁵ The form asks for:

The LLC’s exact legal name as it appears on its original formation documents.
The original filing date of the certificate of organization.
A brief reason for dissolution.
An effective date, which can be the filing date or a future date.
A return address for the filed-stamped copy.

An authorized person signs the form. Submit online through the Secretary of State’s Business and Commercial Services portal or mail the paper form to Little Rock. The filing fee is $45 online or $50 by mail, with mailed checks payable to the Arkansas Secretary of State.⁶ Online filing is typically processed faster. After processing, the LLC’s status changes to dissolved and you receive a filed-stamped copy as confirmation.

Changing Your Mind Within 120 Days

If circumstances shift after the vote, Arkansas allows 120 days to rescind dissolution. It takes the affirmative consent of every member plus a filing with the Secretary of State.⁷ The option disappears once termination becomes effective or if a court ordered the dissolution. If any member is wavering, resolve that before you file with the state.

Close Out Federal Tax Obligations

State dissolution doesn’t notify the IRS. File a final federal tax return for the LLC’s last tax year. A multi-member LLC taxed as a partnership files a final Form 1065 with the “final return” box checked. A single-member LLC reports final business income on Schedule C with the owner’s return. An LLC taxed as a corporation files a final Form 1120 and also Form 966, Corporate Dissolution or Liquidation.⁸

To close your IRS business account, send a letter with the LLC’s legal name, EIN, business address, and reason for closing. Include a copy of the EIN assignment notice if you still have it. Mail it to the IRS in Cincinnati, Ohio 45999. The IRS will not close the account until all required returns are filed and all taxes are paid.⁸

Close Accounts, Licenses, and Payroll

Once dissolution is confirmed, close the company’s bank accounts and cancel its credit cards and lines of credit. Accounts left open invite unauthorized activity under a defunct entity’s name.

Cancel every business license and permit the LLC holds at the federal, state, and local level. Permits that stay active can keep generating renewal fees and penalties. Contact the Arkansas Department of Finance and Administration to close out state tax accounts, including any sales tax permit.

If the LLC had employees, handle final paychecks, employment tax deposits, and W-2s before closing the payroll accounts. LLCs with 20 or more employees that sponsored group health plans may also have COBRA notification obligations when coverage ends.⁹

Keep the LLC’s records for at least seven years after dissolution: tax returns, financial statements, employee records, the dissolution resolution, and the filed-stamped Statement of Dissolution. The IRS can audit returns for three years after filing, and six in some cases, and creditor disputes can still arise after formal dissolution. Organized records are much easier to produce than reconstruct.

1
Justia. Arkansas Code 4-38-702 – Winding Up
2
Justia. Arkansas Code 4-38-704 – Known Claims Against Dissolved Limited Liability Company
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Arkansas Secretary of State. Corporation and Limited Liability Company Final Franchise Tax Report
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Arkansas Secretary of State. Franchise Tax / Annual Report Forms
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Arkansas Secretary of State. Statement of Dissolution for Limited Liability Company
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Arkansas Secretary of State. LLC Forms/Fees/Record Requests
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Justia. Arkansas Code 4-38-703 – Rescinding Dissolution
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Internal Revenue Service. Closing a Business
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U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Workers