If you have a limited liability company (LLC) in Kansas, 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 Kansas.
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, Kansas law requires you to gain the consent of members who own 2/3 or more of the LLC. 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 are allowed to cancel.
3. Notify Creditors
If you owe money to any creditors, you’ll want to notify them in writing of the dissolution and give them detailed instructions on filing any claims for the outstanding debt. In Kansas, a dissolved LLC must pay or make provisions for all claims and obligations that are known, in process, or might reasonably arise for the next ten years after dissolution.
4. Notify Tax Departments
Notify any 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, you’ll need to ensure 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 Kansas
In Kansas, you must file your Certificate of Cancellation to dissolve your business officially. Be aware that your annual report must be up-to-date with the current tax year before you can dissolve.
You can file online or by paper. Read below for full details on both types of filing.
To start, visit the Secretary of State’s page for the Dissolution, Cancellation, or Withdrawal of a Business Entity.
At the bottom, enter your business name and business entity ID number.
Confirm your business.
Select the provided statement for cancellation or type in your reason on the next page.
On the next screen, review your information and click “Continue.”
Finally, type your name to sign your Certificate of Cancellation.
Proceed to the payment page, and pay the $30 filing fee by credit card or echeck.
Download and fill out Kansas’s Certificate of Cancellation.
Print your forms. Make sure not to staple them together.
Prepare a $35 filing fee, payable by check or money order to the Secretary of State or payable by credit card through the filing cover sheet attached to the form. Cash is not accepted.
Mail your documents and payment to:
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612
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.
How much does it cost to dissolve an LLC in Kansas?
It costs $30 to file your Certificate of Cancellation online, and $35 to file by paper.
How long does it take to dissolve a Kansas LLC?
Online filings are processed in about 30 minutes. Paper filings take three to five business days.
Should I close an unused LLC in Kansas?
If you’re not using your Kansas LLC, you should close it to avoid unnecessary fees, filings, and responsibilities. At the very least, you’ll have to pay $55 annually to file your annual report.
What happens if I don't dissolve my LLC in Kansas?
If you don’t dissolve your LLC, you’ll still be accountable for any fees, filings, claims, and responsibilities your LLC may incur. If you fail to file your annual report 90 days after it’s due, your LLC will be forfeited, and you’ll have to reinstate it before you can officially terminate it.
What is the difference between the dissolution and termination of an LLC in Kansas?
In Kansas, dissolution is deciding and voting to close your LLC. After you choose to dissolve, your LLC can only operate in a limited capacity to wind up your business, liquidize and distribute assets, and end suits. Once your affairs are settled, file your Certificate of Cancellation to close your LLC officially.