Have you decided to stop transacting business with your Pennsylvania limited liability company? The state of Pennsylvania 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 Pennsylvania.
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 Pennsylvania 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 Pennsylvania.
How to Dissolve a Domestic Pennsylvania LLC
LLCs that were originally formed in the state of Pennsylvania and wish to be dissolved while still maintaining the ability to wind up their affairs must file the Certificate of Dissolution – Domestic Limited Liability Company with the Pennsylvania Department of State. This form requires the following information:
- Return address
- LLC name
- Registered office address
- Name of commercial registered office provider
- Date of dissolution
- Signature
Another way to dissolve a domestic Pennsylvania LLC is to file the Certificate of Termination. This form differs from the Certificate of Dissolution because it indicates to the state that you are ready to have your LLC removed from the rolls of active businesses in Pennsylvania. This means that your LLC’s existence will end the moment the state processes the filing, so you should file this form only if you’ve already wound up your LLC’s affairs. The information you’ll need for this form includes:
- Your LLC’s name
- Name and address of your registered agent
- An indication that the LLC’s debts are paid or that adequate provisions have been made for these debts
- An indication that there are no court actions pending or that adequate provisions have been made
- Signature/title
- The date
Finally, if your LLC never actually transacted business in Pennsylvania, you can file the Voluntary Termination form. This is a simple document that only requires the following information:
- LLC name
- Name and address of your LLC’s registered agent
- An indication that all liabilities have been discharged or that adequate provisions have been made
- Signatures of a majority of the organizers
- The date
Prior to submitting any of these three forms, you will need to obtain tax clearance from the Pennsylvania Department of Revenue and the Bureau of Employment Security. This can be done by filing the Application for Tax Clearance Certificate with the Department of Revenue and the Department of Labor and Industry.
Once you receive your tax clearance certificate, you will need to submit it along with your LLC’s dissolution document. No matter which of the three forms you file, you will need to pay a $70 fee. Pennsylvania accepts these filings by mail, in person, or online. If you choose to submit your documents by mail or by hand, you can deliver them to the following address:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
In most cases, it will take the Department of Revenue about four weeks to return a tax clearance certificate, and an additional 7-10 business days for the Department of State to process the dissolution. There are also expedited options available for your dissolution documents. You can get same-day service for $100, three-hour service for $300, or one-hour service for $1,000.
How to Dissolve a Foreign LLC in Pennsylvania
Do you need to dissolve a limited liability company based outside of Pennsylvania, but qualified to transact business within this state?
If your LLC was formed outside of Pennsylvania, you will need to file the Statement of Withdrawal of Foreign Registration with the Pennsylvania Department of State in order to dissolve. You must provide the following information to complete this form:
- Return address
- LLC name
- Registered office address or name of commercial registered office provider
- State or jurisdiction of organization
- Date of registration to do business in Pennsylvania
- Mailing address for service of process
- Date of dissolution
- Signature
Just like domestic LLCs, foreign LLCs must obtain tax clearance prior to filing the Certificate of Cancellation of Registration. You can do this by filing the Application for Tax Clearance Certificate with the Department of Revenue, and also sending a copy to the Department of Labor and Industry. Then, you can submit your tax clearance certificate, your Certificate of Cancellation of Registration, and a $70 payment online, by mail, or by hand. If you choose not to file online, you can submit your documents to the following address:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
It will take about four weeks for the Department of Revenue to return your tax clearance certificate, and 7-10 business days for the Department of State to process the dissolution paperwork. This filing has the same expedited options the domestic versions have: same-day service for $100, three-hour service for $300, or one-hour service for $1,000.
What Else Do I Need to Know About LLC Dissolutions in Pennsylvania?
As soon as your dissolution is processed, someone else can begin using your business name. This is why it is important to only dissolve your LLC if you have no intention of conducting further business in the state of Pennsylvania.
Additionally, it is possible for a Pennsylvania LLC to be administratively dissolved by the state. This can occur if a business does not properly dissolve itself, or fails to file its Decennial Report of Association Continued Existence in a timely manner. If this occurs, the state will remove your business name from the state name register, making it available for others to claim. You will need to form a new LLC from scratch if this happens, as Pennsylvania does not have a process for reinstating administratively dissolved LLCs.
Conclusion
Whether you’re dissolving a domestic or foreign limited liability company, the process isn’t complicated.
The one major complicating factor of dissolving a domestic LLC in Pennsylvania is that there are three different forms depending on the status of your LLC, so you’ll need to make sure that you file the correct document.
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 Pennsylvania LLC!