If you choose to close a Colorado LLC (limited liability company), this will require you to complete several tasks. Dissolving the company is a key step that you absolutely cannot skip.
At formation, you registered your LLC with Colorado. Dissolution is formal process that officially ends your company's classification as business entity that is state registered. This process also ensures that claimants, including creditors, cannot reach the business.
The first step towards the voluntary dissolution of your Colorado LLC is checking the operating agreement. This nearly always includes a section dedicated to dissolution, which will outline rules of this process. Most of the time, these rules require LLC members to vote in favor of a resolution that will dissolve the company. There is likely a specific requirement of a minimum percentage of LLC members that must vote for the resolution. Ensure you follow the procedural requirements outlined in your dissolution rules. These may include providing members with advance notice of the meeting or setting the meeting and vote for a particular time.
Regardless of the approach you take the dissolve the LLC, you must ensure you record all the aspects of decision process for the resolution. This record should be in the dissolution meeting's official minutes or on written consent forms.
After voting to dissolve your LLC, the Secretary of Statement must receive a dissolution statement. By law, this statement of dissolution must include:
Additionally, you must provide the state of ID number of LLC. So, you do not need to craft the statement of dissolution from the scratch, the Secretary of State has a sample on its website. Colorado legally requires you to file the statement online with the designated filling system. Filling bears a 25$ fee.
The online filing is typically processed right away. You should note that following your LLC’s dissolution, others can legally use the business name.
After the dissolution is complete, the LLC still exists, but only to wind up your company. You can designate at least one manager or member of the LLC to handle the winding up process.
The Colorado LLC Act outlines several key tasks that are part of winding up. They include:
Another key task involves providing notice to claimants and creditors. It is optional to give notice of the dissolution of the LLC, but it is wise to do so. Taking this step will reduce your liability. It will also provide additional safety when finalizing member distributions.
Based on Colorado Law, you give notice via a written document that is sent directly to any known claimants following dissolution. To count as proper notice, this written document must indicate that any claim filed against LLC must take place by a stated deadline. If it does not occur by then, the action will get barred. The notice should also state that other limiting actions or statutes may bar these claims sooner. You cannot list the deadline as within two years following the notice delivery.
Alternatively, you can provide unknown claimants with notice via a newspaper ad. Check the specific requirements for using publication as notice as there are particular rules. Typically, claimants will have a timeframe of five years following the publication date in which they can bring the claim.
If you decide to deliver notice to claimants that your LLC has dissolved, we strongly suggest you get assistance. Business attorneys will assist you with this.
You should also note that in cases where your LLC has registration in another state as well, you must file an additional form with that state.
Dissolving as well as winding up an LLC is a single step in the process to close it. You will likely read additional guidance to ensure you complete all steps.
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