Have you decided to stop transacting business with your Massachusetts limited liability company? The state of Massachusetts legally requires all business entities to go through a formal dissolution process.
What does this process entail, and how does it differ for domestic and foreign entities? In this guide, we’ll answer all the tough questions about dissolving an LLC in the state of Massachusetts.
What Does It Mean to Dissolve an LLC?
Dissolving a company is an official means of permanently closing your business. While filing the dissolution documentation with the state of Massachusetts is certainly an important part of the process, it’s not the only step. You should also liquidate your business assets, settle any liabilities, and send legal notifications to anyone that had an interest in your company.
Keep in mind that if you fail to complete these steps, you as a business owner could be held personally liable for any outstanding debts or liabilities of your limited liability company. Now that we’ve discussed what exactly dissolving an LLC is, let’s dive into the details of how this process is carried out in the state of Massachusetts.
How to Dissolve a Domestic Massachusetts LLC
In order to dissolve (or “cancel”) a domestic LLC in Massachusetts, you will need to draft and submit a Certificate of Cancellation to the Secretary of the Commonwealth (Corporations Division). You can file the Certificate of Cancellation in person or by mail. You can fill out this document online, and it requires the following information:
- Federal Employer ID Number
- LLC name
- Date of formation
- Reason for dissolution
- Effective date of dissolution
- Signature of authorized representative
Massachusetts accepts Certificates of Cancellation online, by fax, by mail, or in person. The filing fee for this document is $100, although forms submitted online or by fax are subject to a $10 expediting fee. If you choose to file by mail, you will need to specify on the envelope which kind of document is enclosed (in this case, the Certificate of Cancellation).
Unless you file online or by fax, you must deliver or mail the Certificate of Cancellation and any form of payment to the following address:
Secretary of the Commonwealth
One Ashburton Place, 17th Floor
Boston, MA 02108
If you file by mail, the Secretary of the Commonwealth can usually process your paperwork in 3-5 business days. If you file in person, by fax, or online, the wait time is generally 1-2 business days.
How to Dissolve a Foreign LLC in Massachusetts
Do you need to dissolve a limited liability company based outside of Massachusetts, but qualified to transact business within this state?
If you wish to dissolve (also known as “cancel” or “withdraw”) a foreign LLC in Massachusetts, you will need to file the Certificate of Withdrawal with the Secretary of the Commonwealth. Just like the Certificate of Cancellation, you can conveniently fill out this form online. This document will need to include all of the following information:
- Federal Employer ID Number
- LLC name
- Principal address in state of formation
- Principal address in Massachusetts
- Name and address of registered agent
- Statement affirming that both of the following are true:
- The LLC is no longer conducting business in Massachusetts
- All taxes and fees have been paid
- Signature of authorized representative
Both foreign and domestic LLCs must include payment of $100 to file for dissolution, and there is a $10 surcharge for documents filed online or by fax.
If you choose to mail or hand-deliver your Certificate of Withdrawal, you can send it to the following address:
Secretary of the Commonwealth
One Ashburton Place, 17th Floor
Boston, MA 02108
The processing times are as follows: approximately 3-5 business days by mail, or 1-2 business days if delivered in person, faxed, or filed online.
What Else Do I Need to Know About LLC Dissolutions in Massachusetts?
The state of Massachusetts does not offer name protection for voluntarily dissolved businesses. In other words, once your LLC is dissolved, your business name is immediately available for others to claim. However, if your business has been administratively dissolved by the state, your name will be protected for up to one year.
Administrative dissolutions can occur when a business fails to file its annual reports for two years in a row. After the second delinquent report, the Secretary of the Commonwealth will send notice of the delinquency, giving you 90 days to file the reports and pay the fees, or face administrative dissolution.
The process for reinstating an administratively dissolved LLC is similar for domestic and foreign businesses in Massachusetts. In either case, you will need to file the Application for Reinstatement. You can find the application form for domestic LLCs here, and foreign LLCs here. Both applications require payment of a $100 filing fee. You must also file any delinquent annual reports, which each come with a $500 filing fee. Foreign LLCs will also be required to submit a Tax Compliance Certificate from the Department of Revenue and a Certificate of Good Standing from their formation state.
Conclusion
Whether you’re dissolving a domestic or foreign limited liability company, the process isn’t complicated.
The process for foreign and domestic dissolutions is virtually the same, though the information required for the Certificate of Cancellation and the Certificate of Withdrawal is a little different.
Our final note in this guide is that you should make certain each step of the process outlined in this guide is followed closely, to avoid any unforeseen snags with your dissolution. We hope this article helped you to better understand the dissolution process for a Massachusetts LLC!