Steps to Close a Pennsylvania LLC

Closing a Pennsylvania Limited Liability Company (LLC) is a multi-step process that ensures your business ceases operations in compliance with state law and avoids future liabilities. Here’s a step-by-step guide:

1. Understand Dissolution and Winding Up

• Dissolution: Officially ends your LLC’s existence as a state-registered business entity.
• Winding Up: Involves settling debts, liquidating assets, and terminating licenses, permits, and accounts.

2. Review Your LLC’s Governing Documents

• Check your Articles of Organization and Operating Agreement for specific rules on dissolution.
• Most agreements require a vote by members, often with a specified majority, along with advance notice and meeting minutes.
• If no dissolution rules exist, Pennsylvania law mandates unanimous member consent (15 Pa. Cons. Stat. § 8871 (2023)).

3. Record the Decision to Dissolve

• Document the decision in official meeting minutes or a written consent form.
• Note that dissolving the LLC does not automatically halt any ongoing legal proceedings.

4. File a Certificate of Dissolution

• Submit a Certificate of Dissolution to the Pennsylvania Department of State (DOS).
  • Include the LLC’s name, registered address, and a statement of dissolution.
• Filing Fee: $70 (as of 2023).
• Forms are available online through the PA DOS website.

5. Obtain Tax Clearance Certificates

• Pennsylvania requires tax clearance from the:
  • Department of Revenue (DOR)
  • Department of Labor and Industry (DLI)
• Steps:
  1. Complete Form REV-181 (Application for Tax Clearance Certificates).
  2. Submit signed copies to both the DOR and DLI.
  3. Allow at least a month for processing.
• File final tax returns, cancel state tax accounts using Form REV-1706, and check the “final return” box on IRS forms.

6. Settle Debts and Distribute Assets

• Follow Pennsylvania’s legal order for asset distribution:
  1. Creditors (including member creditors).
  2. Members with unreimbursed contributions.
  3. Remaining members based on ownership percentages (15 Pa. Cons. Stat. § 8877 (2023)).

7. Notify Creditors

• While not mandatory, notifying creditors helps limit liability.
• Include claim details, deadlines (at least 120 days from the notice date), and warn that late claims will be barred.
• Publish a dissolution notice in a local newspaper to address unknown claims (15 Pa. Cons. Stat. § 8875 (2023)).

8. Cancel Out-of-State Registrations and Licenses

• If your LLC is registered in other states, file termination forms in those jurisdictions.
• Cancel all business licenses, permits, and bank accounts tied to the LLC.

9. File a Certificate of Termination

• Submit a Certificate of Termination to the Pennsylvania DOS after all debts are settled and assets are distributed.
  • Include:
    1. LLC name and address.
    2. Confirmation of settled debts and distributed assets.
    3. Assurance of no pending legal actions or provisions to address them.
  • Filing Fee: $70.

10. Final Considerations

• Once dissolved, your LLC name becomes available for others to use.
• Ensure all financial and contractual matters are fully resolved before completing the termination process.

By following these steps, you can close your Pennsylvania LLC in compliance with state laws and protect yourself from future liabilities. If you’re uncertain about any part of the process, consulting Dunne Law Offices, P.C. can help ensure everything is handled properly.