How to Dissolve (Close) an LLC in Alabama

If you have a limited liability company (LLC) in Alabama, you may need to shut down the business at some point. On the other hand, maybe you’ve started another company or decided to relocate to another state — whatever the reason, you’ll need to follow the somewhat complicated LLC dissolution process. 

If done incorrectly, you’ll still be responsible for annual reports and fees and could face additional penalties. But, lucky for you, this handy guide explains how to dissolve an LLC in Alabama. 

Properly shutting down an LLC involves several crucial steps, as detailed below. 

1. Vote for Dissolution

LLC owners must vote to dissolve the LLC. Hopefully, you have an operating agreement that details the process. If not, Alabama law requires that all members consent to dissolve. Once you do so, you’ll need to draft a resolution to dissolve the LLC. 

2. Cancel Business Licenses and Permits

If you were required to get licenses and permits for your business, you’d need to contact the issuing agencies to cancel them so that you’re not charged renewal fees. If you have any outstanding fees, you’ll likely need to pay them before you can cancel.

3. Notify Creditors

If you owe money to creditors, you’ll need to notify them in writing of the dissolution and give them detailed instructions on filing claims for outstanding debt. In Alabama, you must provide a mailing address for claims and a deadline of at least four months from the notice’s date to file a claim.

You can do this either before or after you dissolve your LLC, but be aware that creditors can file claims for any incidents up to the official date of dissolution.

4. Notify Tax Departments

Notify relevant tax authorities of the dissolution and pay any outstanding taxes due.

5. Cancel Contracts and Settle Financial Obligations

If you have contracts with vendors, lessors, or any other outstanding financial obligations, make sure all your obligations are fulfilled and all contracts are canceled. 

6. Distribute Assets to Members

If the LLC has any assets remaining in any form after all financial obligations have been settled, they must be distributed to members based on LLC ownership percentages. 

If the assets are equipment, property, or other non-cash assets, they’ll need to be sold first so distributions can be made in cash. 

7. File the Dissolution Papers with Alabama

First, download and fill out the Articles of Dissolution from the Alabama Secretary of State website to officially dissolve your Alabama LLC.

Mail two copies of the completed form, along with a self-addressed stamped envelope, to:

Secretary of State, Business Services
PO Box 5616
Montgomery, Alabama 36103

The fee for filing the dissolution papers in Alabama is $100.

You can pay by check, money order, or credit card payment through the second page of the Articles of Dissolution PDF.

In Closing

Regardless of the reason, LLC dissolution must be done right to avoid legal issues and financial penalties. Therefore, it’s highly recommended that you employ the services of an attorney to ensure everything is done correctly and all bases are covered.