Nevada LLC Dissolution: The Ultimate Guide to Closing Your Company

The United States is among the most entrepreneurial countries worldwide. With such a talented, business-minded workforce and plenty of resources, it’s unsurprising that an average of 4.7 million businesses are launched in the country each year.

However, 90% of those startups fail in the end due to a lack of funding or misreading market demands. In 2023 alone, about 3,200 venture capital-funded companies went out of business. Maybe there was a lack of planning, or perhaps the market wasn’t ready for these companies’ products. 

The cold, hard truth is that failure is a universal risk of starting a business. When ventures go out of business, their owners have no choice but to discontinue it. If your Nevada LLC is no longer economically viable, now’s the right time to start working on its proper dissolution.

Not sure how to go about the tedious, lengthy process? This blog will help you figure out how to file for a Nevada LLC dissolution correctly.

What’s the Difference Between the Dissolution and Termination of an LLC?

Before we discuss how to end your LLC, let’s discuss the difference between dissolving and terminating a business.

Most people use the terms “dissolution” and “termination” interchangeably, even though they have different meanings. While both processes must happen to end an LLC’s existence, they refer to different stages of the company’s closure journey.

First, let’s talk about dissolution. Dissolving a business occurs when the LLC members decide to stop business operations and file the necessary paperwork to do so. This is when the company starts winding up the business. It’s when assets are liquidated, the business license is closed, and the LLC prepares to shut its doors forever.

On the other hand, a business’s termination means it has wrapped up all operations, settled all debts, completed all contracts, and officially closed. As far as the state is concerned, it’s when its records are wiped. When an LLC has been “terminated,” it means it no longer exists.

In a nutshell, the word dissolution refers to the process itself, while termination means the official discontinuation of operations. Moving to dissolve a company triggers the lengthy process that will end in its termination.

The Two Types of Dissolution

While LLCs dissolve for various reasons, they typically fall into two categories: voluntary and involuntary.

Voluntary Dissolution

Voluntary dissolution is when the owners of an LLC collectively decide to discontinue their company’s operations. It’s when there is a proactive decision to close the business, typically decided through a group vote. 

Here are some events that might trigger an LLC’s voluntary dissolution:

• It has completed its purpose and sold all its properties and products.
• It no longer profits due to outdated products that have caved under pressure from more advanced competitors.
• Its owners cannot agree on important business decisions and have irreconcilable conflicts.
• It is suffering from financial strain and can no longer pay its debts to its creditors.
• Key members of the LLC have retired.
• The conditions for liquidation are extremely favorable (like when the company’s assets rise tremendously in value).

Involuntary Dissolution

On the other hand, we have involuntary dissolution, which happens when an LLC has no choice but to end operations after being mandated by law. It’s when the LLC must be dissolved against its owners’ will, usually through a court order.

This type of dissolution occurs when the LLC fails to comply with certain state and business laws, including:

• Failing to file the necessary annual reports caused the state to dissolve the LLC administratively.
• Being involved in illegal sales and activities, such as money laundering or fraudulent tactics.
• Lawsuits filed between LLC members. When these get too messy, the court can sometimes order the LLC to cease operations.

How to Dissolve a Nevada LLC, Step by Step

1. Put the dissolution to a vote among LLC members

Start by calling a meeting with your co-owners. You must vote on your LLC’s termination at this meeting and create a new resolution. For the resolution to dissolve the company to pass, there must be a majority vote.

Before voting to close the LLC, make sure to review your company’s operating agreement. This will refresh you on the agreed-upon rules of engagement when dissolving the company, from how to close it to the distribution of assets.

2. File the articles of dissolution

The next step is filing articles of dissolution, the official paperwork you need to submit to the Nevada Secretary of State to officially close your business. It’s like the articles of organization, except it’s for shutting the company down but opening it up. You can either file these papers in person, by mail, or, most conveniently, online.

The articles of dissolution must be signed by any member of the LLC who wants to be dissolved. They must also contain certain details, like the type of dissolution of the LLC and the date and time the dissolution is effective. This date should be within 90 days of the filing.

3. Notify your tax agencies and close your tax accounts

Next, you must settle your LLC’s tax obligations. If you work with any tax agencies, notify them of the dissolution as soon as possible. Then, file your final taxes, including income tax, sales tax, payroll tax, insurance taxes for your employees, and many more.

Need help with finalizing your LLC’s taxes? Check out NCH’s tax resolution services, and leave the hard work to us!

4. Settle debts and claims with creditors

Creditors are your banks and suppliers that your LLC might owe money to. Before terminating your company, you must settle all debts you might owe to them. Give landlords, vendors, contractors, and investors instructions on how they can make their claims, such as sending a mailing address to which they can send their request or contact information they can reach out to. It’s also best to give a deadline for when they can make the claim.

5. Finish all deliverables and cease business operations

Do everything else you need to do to thoroughly stop business operations. These may include but are not limited to:

• Informing customers that the business is closing, whether on social media or through newsletters and ads
• Fulfilling all pending customer orders
• Cancel your business licenses and permits, especially those with automatic renewals
• End all contracts, whether for properties you rent or work that contractors do for you
• Close the company’s bank accounts

6. Distribute the remaining LLC assets

Finally, finalize the distribution of assets, which should be divided among the LLC members according to the percentage of the company they own. This is also detailed in the articles of organization from when you created your company.

For example, let’s say your company has $100,000 after settling all the taxes, debts, and claims. You owe 50% of the company, while two other partners owe 25% each. You walk away with $50,000, while your partners get $25,000 each.

How Long Does the Nevada LLC Dissolution Process Take?

After filing articles of dissolution, it usually takes the state of Nevada 7-10 working days to process your request. You can pay an extra fee to expedite your papers for 24-hour processing. When your submission is being reviewed, you can receive a copy of the papers confirming your company’s dissolution via mail.

But that’s just for filing the official papers to dissolve your company. Winding down the business and officially closing shop might take months after that, depending on how many engagements you need to settle.

How Much Does It Cost to Dissolve a Nevada LLC?

When filing your articles of dissolution with the Nevada Secretary of State, you will be required to pay a filing fee of $100. You can also expedite the processing of your dissolution for around $125 for 24 hours, $500 for two hours, and $1,000 for one hour.

If you want a certified copy of your Nevada LLC dissolution confirmation, you must pay another $30 per certification.

Let NCH Do the Heavy Lifting of LLC Dissolution for You!

Dissolving an LLC can be tricky, given all the things you need to tick off your checklist before you can terminate your company. Without the help of an expert, you can even find yourself dealing with issues such as errors and omissions in your articles of dissolution. 

If the process looks like too much work and you’re not sure how to kickstart the dissolution process, NCH can help do the heavy lifting for you. Talk to us about your plans to dissolve your LLC, and we’ll guide you through it step by step. That way, you can rest assured you thoroughly, accurately, and correctly undertake the entire process.

One of our business experts or consultants at NCH, Inc. can provide you with the appropriate reference material for further information. To learn more about this process or to get professional assistance, contact Nevada Corporate Headquarters, Inc. at 800-508-1729.

Disclaimer: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.