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I want to dissolve my single member LLC but I did not pay taxes. LLC never conducted any business. The LLC is in IL.

Palatine, IL |

Hi

I want to dissolve my single member LLC but I did not pay taxes.
LLC never conducted any business.
The LLC is in IL.
What form do I need to fill in to officially dissolve it ?

Thanks

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Attorney answers 4

Posted

You may be better off letting it die on the vine. You have no personal responsibility for the taxes as long as you have not taken a distribution from the LLC. The LLC will receive tax and penalty statements from the state for a few years, but you can ignore them. If you still want to dissolve it, go to IL.gov and search for LLCs.

DISCLAIMER—This answer is for informational purposes only under the AVVO system, its terms and conditions. It is not intended as specific legal advice regarding your question. The answer could be different if all the facts were known. This answer does not establish an attorney client relationship. I am admitted only in California. (Bryant) Keith Martin sbbizlaw.com

Asker

Posted

Hi Mr Martin Thanks for responding. What is a distribution when income is $0 and losses were made in the initial year. I've never made any income out of the LLC all these years. Mr Hanson's comment on fees is scaring me. The LLC was started back in 2007. I spoke to someone in Secretary of State a few years ago and I think she said I could just leave it. But I just checked for the LLC to make sure it's dissolved, the entity is still there. I like to completely dissolve it and not have to pay the fines

Asker

Posted

Also what is a natural LLC death ? How many years is that before it's removed from the secretary of state database ?

Bryant Keith Martin

Bryant Keith Martin

Posted

I do not know how long it survives. Mr. Hanson (who is admitted in IL) suggests that there are two periods of months until the state dissolves it. I can understand that you might not be comfortable with the outstanding fees and fines, even though you do not owe them. If the comfort is worth it, just pay the fees and do a formal dissolution. You may want to hire a business lawyer to be sure it is done right.

Asker

Posted

thanks Mr Martin for the response.

Posted

The form is found at http://www.cyberdriveillinois.com/publications/pdf_publications/llc3515.pdf It is labeled as LLC-35.15. However if no transactions were made via LLC and you have no liabilities, letting it dissolve by not renewing it is an option.

Asker

Posted

Hi Mr Lysinki Thanks for responding. I've never made any income out of the LLC all these years. Mr Hanson's comment on fees is scaring me. I didn't know any better about running a LLC ie myself, know nothing about annual reports, etc. The LLC was started back in 2007. I spoke to someone in Secretary of State a few years ago and I think she said I could just leave it and never indicated to me that I should submit annual reports to avoid fines. This month, I just checked for the LLC to make sure it's dissolved, the entity is still there. I like to completely dissolve it and not have to pay the fines which is a lot of $ given the accumulated years. Thanks

Asker

Posted

Also what is a natural LLC death ? How many years is that before it's removed from the secretary of state database ?

Adam J. Lysinski

Adam J. Lysinski

Posted

If you do not file your annual report and pay the fee, your LLC will be involuntarily dissolved by the secretary of state automatically. Based on what you wrote previously, that might be an acceptable outcome for you. Traditionally, once that happens you will not have to do anything else, unless you want to. If your LLC had no dealing with any third parties, I wouldn’t worry about it.

Asker

Posted

Hi Mr Lysinski I called up the Secretary of State and they say it's been involuntarily dissolved on 01/14/2011. If it is dissolved, why would the LLC entity still be there ? Shouldn't it be scrubbed or removed ? I dont get it thanks

Asker

Posted

I am just afraid that this unpayment would damage my credit score and report. Again, I dont have any debt with this LLC.

Adam J. Lysinski

Adam J. Lysinski

Posted

Your LLC is simply dissolved. Based on what your wrote, I do not think this will have any other consequence for you.

Asker

Posted

I am looking to dissolve my LLC in Illinois since I moved from state. I have been doing business under that LLC but I do not owe any money to state or any other company. Can I just let it go by not filling the annual report? Thank you

Posted

Both of the previous answers were good ones, and you notice that both suggested you just let the LLC die or wither away, which would be my advice also. To further explain this, the Illinois LLC act requires each domestic and admitted foreign LLC to file a report to the Secretary of State once a year, in the month which is the anniversary of its organization or admission. A filing fee of $250 is due with the report. If you fail to file that report, the Secretary will first notify you that the company has slipped into delinquent status, and you have so many more months to file the report. If you still fail to file, a penalty of $300 is added to the filing fee of $250. After that, when a few more months have passed, the Secretary will dissolve the company. Technically the company will owe the filing fee and the penalty, but, since you are not personally liable for the debts of the company, the State will have no one to collect from, and that will be the end of the matter. The name of your LLC will not be available for three years after dissolution, just in case you want to come back and reinstate, but if you do reinstate you will have to pay the original filing fee, the penalty, interest, fees for additional years, penalties on those years, etc.

If you file the articles of dissolution you will have to pay a filing fee, but you won't have penalties and interest to worry about if you change your mind later and wish to reinstate.

Answering your question on AVVO, does not create a lawyer-client relationship between us. I practice in Illinois and would be happy to hear from you if you have additional questions.

Asker

Posted

Hi Mr Hanson Thanks for responding. I am getting scared with these amounts of fines. The LLC was started back in 2007. I spoke to someone in Secretary of State a few years ago and I think she said I could just leave it. But I just checked for the LLC to make sure it's dissolved, the entity is still there. I like to completely dissolve it and not have to pay the fines because I don't have that kind of $ given all these years.

Asker

Posted

Also what is a natural LLC death ? How many years is that before it's removed from the secretary of state database ?

Linscott Roberts Hanson

Linscott Roberts Hanson

Posted

It will be dissolved in under a year, but, under recent legislation intended to help owners of companies who just forgot or failed to file, the name will be kept available for up to three additional years in case they wish to reinstate. Lin Hanson

Asker

Posted

I called up the Secretary of State and they say it's been involuntarily dissolved on 01/14/2011. If it is dissolved, I suppose this entity will be scrubbed from the database after 2013 ? I am just afraid that this unpayment would damage my credit score and report. Again, I dont have any debt with this LLC.

Linscott Roberts Hanson

Linscott Roberts Hanson

Posted

The Illinois act has some very strong language about members not being liable for the debts of the company. You are not personally responsible for these filing fees and penalties. Relax, you're out of the company.

Posted

If you do nothing the Secretary of State will "involuntarily" dissolve the entity. Based on your information there are no tax consequences so this appears to be solely an administrative issue. If you really want to spend $100, you can file "Articles of Dissolution" as suggested above.