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What is the difference between dissolving and terminating an LLC?

One of the cheapest ways to close down a company is by voluntary dissolution. This involves a small administrative fee and can be carried out using form DS01. Strict eligibility rules surround voluntary dissolution, however, and the main requirement is that your business is solvent.

What does it mean to dissolve a company?

You voluntarily dissolve your business by filing Articles of Dissolution, which legally brings the existence of the LLC or corporation to an end in your state of incorporation or formation or in your state of qualification, if you had registered to transact business in another state.

What happens when you dissolve a company?

The assets and liabilities will be reallocated among the companys owners and creditors. A voluntarily legal closing of a business is called dissolution, whereas liquidation is the sale of a companys assets to pay creditors.

Is dissolving a company the same as closing?

Dissolving an LLC ends the business entitys legal status with the state. This often occurs when the business owner decides they no longer want to continue operations and wish to end their entrepreneurial journey. Its a difficult call to make, but it doesnt necessarily mean that the business has failed.