If you have a limited liability company (LLC) in Kentucky, you may need to shut down the business at some point. Maybe you’ve started another company or moved 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 Kentucky.
Properly shutting down an LLC involves several crucial steps, as detailed below.
1. Vote for Dissolution
LLC owners, known as members, must vote to dissolve the LLC. Hopefully, you have an operating agreement that details the process. If not, Kentucky law requires you to gain the written consent of all members. 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 need to notify them in writing of the dissolution and give them detailed instructions on filing any claims for the outstanding debt. In Kentucky, your notice must provide a mailing address for claims to be sent to and a deadline of at least 120 days for claimants to file a claim.
4. Notify Tax Departments
Notify any relevant tax authorities of the dissolution and pay any outstanding taxes due. At the very least, Kentucky’s Secretary of State recommends that you contact the following:
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 Kentucky
To officially dissolve your LLC, you’ll need to file your Articles of Dissolution with the Kentucky Secretary of State.
You can file your dissolution either online or by paper. Read on to see instructions for both options.
To file your dissolution online, visit Kentucky’s online filing portal and search for your business by name.
From the results, select your LLC to view its information.
At the top, click the “File Dissolution” button.
Fill out the next page and type your name at the bottom to electronically sign your filing.
Review your document and proceed to the payment screen.
Pay the $40 filing fee by credit card, EFT, or prepaid account with the Secretary of State’s Office.
Once your payment has been confirmed, your Articles of Dissolution will be filed.
To file your dissolution by paper, download, fill out, and print the Articles of Dissolution.
If you’re mailing your document, make a $40 check payable to the Kentucky State Treasurer.
Mail your document and payment to:
Secretary of State
PO Box 718
Frankfort, KY 40602
If you’re delivering your document in person, you can pay by cash, check, debit or credit card, or prepaid account with the Secretary of State. Within their business hours of 8:00 AM to 4:30 PM M-F, visit the Division of Business Filings at:
Room 154, Capitol Building
700 Capital Avenue
Frankfort, KY 40601
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 Kentucky?
It costs $40 to file Articles of Dissolution in Kentucky.
How long does it take to dissolve a Kentucky LLC?
Your filing will likely be processed the same day it’s received. At most, your filing will take three business days to process.
Should I close an unused LLC in Kentucky?
If you’re not using your Kentucky LLC, you should close it to avoid unnecessary fees, filings, and responsibilities such as filing your annual report.
What happens if I don't dissolve my LLC in Kentucky?
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 don’t keep your LLC in good standing, Kentucky’s Secretary of State may choose to dissolve your LLC administratively.
What is the difference between the dissolution and termination of an LLC in Kentucky?
Dissolution is the decision and process of closing your business. Once you file your Articles of Dissolution with the Secretary of State, your Kentucky LLC can still operate in a limited capacity for liquidizing assets, settling claims, and winding up your business. However, once your affairs have been settled, your LLC is officially terminated.