How to Close an LLC: 7 Steps From the Member Vote to the Certificate of Cancellation

An LLC closes by a sequence of acts, and New York and Delaware disagree about where in that sequence the state is told. New York asks for articles of dissolution near the beginning, within ninety days of the decision. Delaware waits for a certificate of cancellation at the end, after the winding up is done. An owner who forms in one state and operates in the other, which describes a good many small companies, should know which calendar governs before the first document is signed.

What follows is the ordinary case: a solvent LLC, whose members want to shut it down cleanly and divide what remains. The harder case, where debts exceed assets and personal liability is in question, is treated on a separate page of this site.

1. The Operating Agreement Sets the Vote Before the Statute Does

Read the operating agreement first. Both states let it control.

In New York, LLC Law section 701(a) dissolves the company on the first of several events, among them events the operating agreement specifies and "the vote or written consent of at least a majority in interest of the members," subject to any higher threshold the agreement sets. Delaware's default is steeper: absent a different rule in the LLC agreement, section 18-801(a)(3) requires the vote or consent of members owning "more than 2/3" of the then-current interest in profits.

The difference is worth a sentence in the minutes. A three-member Delaware company in which two members hold sixty percent between them cannot, on the statutory default, dissolve by their vote alone, and whether the silent third member will sign is a question that tends to be answered only when someone asks.

2. Someone Must Be Named to Wind Up

Dissolution does not end the company. It changes its purpose. Under New York's section 703, the persons winding up the company's affairs may, in its name, prosecute and defend suits, dispose of property, discharge liabilities and distribute the remaining assets. Delaware's section 18-803(a) assigns the work to a manager who has not wrongfully dissolved the company or, if there is none, to the members or a person approved by members owning more than 50 percent of the interest in profits.

Name the person in the resolution. An LLC whose members each assume another is handling the final bank statement will find, some months later, that nobody did.

3. New York Wants Its Articles of Dissolution Within Ninety Days

New York's section 705 requires articles of dissolution to be filed "within ninety days following the dissolution and the commencement of winding up." The filing states the LLC's name (and original name, if it changed), the date its articles of organization were filed, and the event that gave rise to the filing, and it is effective when filed. The Department of State listed a $60 filing fee as of September 2026, and the form can be filed online.

No tax consent is attached. That distinguishes the LLC from a New York corporation, whose certificate of dissolution cannot be filed without the Tax Department's consent, though the absence of a consent requirement has never meant, if one reads the statute with care, that the taxes may be left for later.

4. Creditors Are Paid, or Provided For, Before Members See Anything

This is the step that decides whether the closing stays clean. Delaware writes the order into section 18-804(a): the company's assets go first to creditors in satisfaction of its liabilities; then to members and former members for distributions already owed; and only then to members for the return of their contributions and in respect of their interests.

Section 18-804(b) goes further than most owners expect. The company must make provision "reasonably likely to be sufficient" for claims that, on facts known to it, are likely to arise or become known within 10 years after dissolution. The period is long. A solvent LLC that sold products with warranties, or signed a lease with a guaranty tail, or employed people in a job where claims surface late (and nearly every small company has at least one of these, sometimes without realizing it, in a contract drafted by someone who has since retired) has claims of exactly that kind to consider before the final distribution.

And the members who take the money are the ones at risk. Under section 18-804(c), a member who receives a distribution in violation of the order in subsection (a), and knew it at the time, is liable to the company for the amount.

The published-notice procedures that let a dissolving corporation bar late claims, New York's Business Corporation Law section 1007 and Delaware's sections 280 through 282, are corporation statutes. An LLC should not assume it can borrow them.

5. The Final Returns Follow the Federal Classification

An LLC is taxed as whatever its classification makes it. A multi-member LLC taxed as a partnership files a final Form 1065 and checks the final return and final K-1 boxes; a single-member LLC disregarded for federal purposes reports the final year on the owner's Schedule C; an LLC that elected corporate treatment files the corporate return. Final payroll forms, 1099s and the letter closing the EIN account follow the IRS's closing checklist.

A New York sales tax vendor files a final sales tax return within 20 days after ceasing business and surrenders or destroys its Certificate of Authority.

6. The Last Distribution Is Documented Like a Sale

What remains after creditors and reserves belongs to the members, in the proportions the operating agreement sets. Write it down: a closing statement showing the assets, the liabilities paid, the reserve held back and why, and the amount each member received. The document is dull. It is also the one a member's lawyer will ask for if a claim appears in year four.

7. The Certificate of Cancellation Ends the Delaware Company

In Delaware, section 18-203 calls for a certificate of cancellation "upon the dissolution and the completion of winding up." It states the name, the date the certificate of formation was filed, and any future effective time; once it is filed, the Secretary of State will not issue a certificate of good standing. The fee schedule revised August 1, 2026 lists $220 for a domestic cancellation, plus the annual taxes due to cancel. An LLC that used an assumed name in New York may also file a certificate of discontinuance with the Secretary of State under General Business Law section 130(10). The statute says may, and the choice is the owner's.

Then the registered agent is told, in writing, that its service is no longer required.

When the Closing Is Not Solvent

Some LLCs reach step four and find the creditors cannot all be paid. That changes the work. Delancey Street, a business debt settlement company and not a law firm, offers a free and confidential review of merchant cash advance and similar balances a closing company cannot retire, and involves independently licensed counsel when a legal question arises; where the members face contested claims or guaranties, they should see an attorney before any distribution. No creditor is required to accept less.

You vote to close the company and then you spend a season proving you meant it. The certificate is the proof.