How to Dissolve an LLC in Delaware

Closing your Delaware LLC involves various tasks, including filing a certificate of cancellation with the Delaware Secretary of State. 

To cancel your LLC Delaware, you must also complete the “winding-up” of your business activities.

This post covers the steps to dissolve and wind up your Delaware LLC.

Basics of LLC Dissolution

Dissolution is the act of officially dissolving your Delaware LLC by winding up your business affairs and then filing a certificate of cancellation with the Delaware Secretary of State.

Once dissolution is complete, it ends your LLC’s legal status, its future state and federal tax filing obligations (you still file final returns), and future financial liabilities to its members. 

Types of LLC Dissolution

There are 3 different dissolution types used to dissolve an LLC: voluntary, administrative, and judicial.

Each type of dissolution happens for different reasons, but all require completing a wind-up process.

Voluntary dissolution:

Voluntary dissolution is when an LLC’s members vote to close their business.

Voluntary dissolution can result from internal disputes between LLC members, financial difficulties, or a dissolution trigger, such as the departure or death of an LLC member. 

Dissolution triggers are pre-agreed reasons for closing an LLC written into the LLC operating agreement by its members upon forming the business. 

Administrative dissolution:

The State of Delaware can cancel an LLC’s certificate of formation for failing to maintain good standing.

Delaware LLCs don’t file an annual report, but they must meet ongoing state requirements, such as: 

• Paying the annual LLC tax ($400 a year starting with the 2026 tax year, due June 1) on time. After three years of unpaid tax, the state cancels the LLC’s certificate of formation.
• Maintaining a registered agent within Delaware state. If an agent resigns and no new agent is appointed within 30 days, the state cancels the LLC’s certificate of formation.

Judicial dissolution:

The Delaware Court of Chancery can dissolve an LLC when it isn’t reasonably practicable to carry on the business in line with the LLC agreement (§ 18-802).

A member or manager of the LLC can apply to the Court of Chancery for judicial dissolution on this basis.

Dissolving Your LLC in Delaware

To dissolve your Delaware LLC, the members consent to dissolve, the LLC winds up its affairs, and then it files a Certificate of Cancellation with the Delaware Secretary of State. 

Winding up means closing all of your LLC affairs, including settling your LLC debts, closing business accounts, canceling licenses and permits, notifying creditors and vendors, and liquidating your assets.

Step 1: Vote to dissolve your Delaware LLC 

LLC members who vote to dissolve their business must comply with their certificate of formation or their LLC operating agreement. 

A vote to dissolve an LLC often requires a majority, which can be the number of members voting or relative to their percentage share of the business.  

For example, an operating agreement could require two-thirds of LLC members to vote for dissolution to pass. 

Single vs. multi-member LLC dissolution

Single-member LLCs must take the same steps as multi-member LLCs to dissolve their Delaware LLCs. The difference is that a single-member LLC doesn’t need a majority vote, as only one owner exists. 

Dissolution rules in your LLC operating agreement

When creating your operating agreement LLC Delaware, you should also include rules for dissolution to avoid disagreements with fellow members.

Operating agreement dissolution rules often include:

• The dissolution triggers (reasons you might close the business)
• The number of members who must approve the LLC’s dissolution
• How the vote will take place
• Voting results notification procedure
• How the LLC will inform creditors and pay its debts
• The procedure for closing the LLC’s business activities
• How assets will be divided

Before implementing your LLC dissolution, ensure your reasons comply with your operating agreement rules and any vote complies with its terms and conditions. 

Delaware-specific rules for voting to dissolve your LLC

LLC members (or single-member LLC owners) who do not create dissolution rules must comply with Delaware’s default rules for LLC dissolution. 

Delaware law states that LLC owners can dissolve their business if members owning more than two-thirds of the profits interest consent.

Step 2: Wind up all business affairs and handle any other business matters

After the LLC members vote to dissolve their LLC, they can begin winding up the business affairs.

Wind-up measures include but are not limited to:

• Paying all debts
• Canceling all LLC contracts
• Closing business bank accounts and any lines of credit
• Letting employees go
• Ending any business licenses or permits
• Notify all creditors and vendors of the LLC’s closure
• Informing the LLC registered agent
• Disbursing any assets after all debts, overdrafts, loans, or other credit lines are paid

Step 3: Settle debts and assets with creditors

Delaware state doesn’t require LLC members to notify their creditors of dissolution. 

However, you should inform your creditors of the dissolution before it is complete to avoid future problems after the LLC is dissolved.

For example, by providing notice to all creditors saying they should send any outstanding invoices or claims against your LLC to your registered agent’s office by a specific date, no one can say you closed your business to avoid paying your bills. 

However, Delaware requires an LLC to pay, or make reasonable provision for, its known claims, pending claims and lawsuits, and claims likely to arise within 10 years before dissolution can be completed (§ 18-804). 

Step 4: Notify tax agencies and settle remaining taxes

Close your Delaware Division of Revenue business license and tax accounts. 

Delaware also requires an LLC to pay all its taxes (including the $400 annual LLC tax) before filing its certificate of cancellation. 

Even if you close your LLC on January 1, you must pay the entire calendar year before the state will approve your cancellation filing.

Step 5: File a certificate of cancellation

Once you complete all the wind-up steps and have distributed the LLC’s assets, you must cancel your LLC’s certificate of formation by submitting your Certificate of Cancellation to the Delaware Division of Corporations (DOC). 

The Delaware certificate of cancellation requires:

• Your LLC registered name
• The date on which you filed your LLC certificate of formation

The certificate of cancellation fee is $220 (plus any annual taxes due), and an authorized person must sign it. 

You can download a certificate of cancellation form.

Conclusion

Dissolving your Delaware LLC takes time, and you must complete all the wind-up steps before the state approves your certificate of cancellation. 

Fortunately, though, you can do most of it yourself or with the help of your accountant. 

Always refer to your LLC rules for dissolution before taking any action; if there are internal disputes between members or financial issues, it’s best to speak with a Delaware dissolution lawyer.

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