Glossary of LLC Dissolution Terms

Articles of Dissolution: Legal documents filed with a state authority to officially dissolve an LLC.

Operating Agreement: A contract among LLC members governing the LLC's business and members' financial and managerial rights and duties.

Member: An individual or entity that owns part of the LLC.

Dissolution: The formal process of ending the existence of an LLC.

Creditor: A party to whom the LLC owes money or obligations.

Asset Distribution: Dividing the remaining LLC assets among members after all liabilities are settled.

Tax Clearance: Verification from tax authorities confirming that the LLC has no outstanding tax liabilities.

Wind Up Affairs: The activities undertaken to close the business, including paying off debts, selling assets, and preparing final financial statements.

Final Tax Return: The last tax return filed by an LLC, signaling the end of its business operations.

Debt Settlement: Paying off all financial obligations owed by the LLC.

Secretary of State: The state office where LLCs file Articles of Dissolution and other required documents.

Compliance: Fulfilling all legal requirements and regulations in the dissolution process.

Liquidation: Converting LLC assets into cash to pay off creditors.

Notice of Dissolution: A formal announcement to creditors and the public about the LLC’s dissolution.

Registered Agent: An individual or entity appointed to receive legal papers on behalf of the LLC.

Good Standing: A status indicating that an LLC has met all its legal obligations and is authorized to do business in the state.

Franchise Taxes: Taxes levied on businesses for the privilege of being registered to operate in a state.

Annual Report: A yearly filing submitted by an LLC detailing its current business status and information.

Reinstatement: The process of returning a dissolved LLC to active status.