If you create an LLC in Indiana, you’re laying the foundation for your business’s success. But just as starting your LLC took careful planning, closing it also requires attention to detail. Whether you’re pivoting to a new venture or wrapping up for good, understanding how to legally dissolve your Indiana LLC will help you move on without lingering obligations or unexpected surprises.

Basics of LLC Dissolution

Quite simply, an LLC dissolution is when a limited liability company halts all operations and ceases to be a legal entity. Once dissolved, the business can no longer operate in the state of Indiana. Since the LLC ceases to exist, the members of the business are no longer required to file annual reports, pay taxes, or maintain licenses for the business.

There are three different types of LLC dissolution in Indiana. An LLC may cease to exist due to administrative, judicial, and voluntary dissolution. Administrative and judicial dissolution are involuntary and not controlled by the members, while voluntary dissolution is. Understanding the difference between the three is crucial for how you proceed in dissolving your business.

Types of LLC Dissolution

Here is a brief overview of three ways and reasons an LLC can be dissolved in Indiana:

Administrative dissolution

In an administrative dissolution, the state of Indiana comes in and dissolves an LLC. This is usually due to a violation committed by the LLC or one of its members as laid out under IN Code § 23-0.5-6-1 (2023). These violations include:

• Failing to pay any fee, tax, interest, or penalty covered under the section above within 60 days of its due date;
• Delivering a biennial report to the Indiana Secretary of State’s office more than 60 days past its due date;
• Not having a registered agent in Indiana for more than 60 days, and
• Not informing the Indiana Secretary of State’s office within 60 days that the LLC’s registered agent has changed.

Judicial dissolution

In Indiana, circuit or superior courts can dissolve an LLC when they find the behavior of the LLC to warrant such a punishment. Often called a corporate death penalty. The strict guidelines that the courts must adhere to ordering a judicial dissolution are provided in IN Code § 23-1-47-1 (2023). The reasons a court may order a judicial dissolution of any LLC for:

• The LLC received its articles of incorporation through fraud; or
• The LLC exceeded or abused the authority conferred upon it by law.

For an LLC with shareholders, there are additional reasons, including:

• The management is deadlocked, shareholders are unable to break the deadlock, the situation is causing irreparable harm to the LLC; or
• Shareholders have failed to elect directors to fill expired positions for at least two consecutive annual meeting dates.

For an LLC with creditors, a judicial dissolution may be ordered if:

• The execution of a creditor’s judgment against the LLC is unable to be made because the LLC is insolvent; or
• The LLC admits in writing it can not settle a creditor’s judgment against it because it is insolvent.

Voluntary dissolution

A voluntary dissolution occurs when an LLC, on its own, makes the decision to halt all business activities. Depending on the LLC’s operating agreement and how many members (registered owners) there are, a voluntary dissolution may require a vote.

Dissolving Your LLC in Indiana

Indiana is unique because it has separate rules for voluntarily dissolving an LLC, depending on when it was formed. Any LLC formed on or prior to June 30, 1999, needs to follow the IN Code § 23-18-9-1 (2023). An LLC formed after that date must follow IN Code § 23-18-9-1.1 (2023).

The steps below are only general guidelines, and it is advisable to consult an expert to ensure you are dissolving your business correctly based on the most up-to-date requirements and the specifics of your LLC.

Step 1: Vote to dissolve the LLC

Not all LLCs must vote before dissolving, but some do. In general, LLCs with multiple members will require a vote where the majority of the members agree to the dissolution. Single-member LLCs do not need to vote.

However, even multi-member LLCs may not require a vote based on the business’s operating agreement. Many operating agreements include pre-agreed upon dissolution triggers, and if any of them are activated, a vote is not necessary.

Dissolution rules in your LLC operating agreement

Many LLCs write into their operating agreement when and how the LLC can be dissolved. If your LLC’s operating agreement includes language on what actions should take place in regard to voting, paying debts, closing business activities, splitting the LLC’s assets among members, etc., these must be followed.

Indiana-specific rules for voting to dissolve your LLC

Multi-member LLCs must follow their operating agreements when voting on voluntary dissolution.

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

Making the formal decision to voluntarily dissolve your LLC is just the first step before it ceases to exist as a business entity. After voting, there are other business matters which must be addressed. These can include:

• Contact the relevant Indiana government agencies to cancel any business licenses or permits;
• Inform the LLC’s registered agent that you have made the decision to close the business;
• Reach out to LLC’s vendors and customers with active accounts to tell them of the upcoming closure;
• Plan the timeline and process for closing the LLC’s business bank and credit card accounts; and
• Tell the employees the business will close and finish any necessary employment-related filings.

Step 3: Settle debts and assets with creditors

Although personal assets are most likely protected by an LLC, creditors can go after assets owned by the business. It is a good idea to contact any creditors to settle any remaining debt. Speaking with a tax expert at this stage can help protect you from legal and financial issues in the future.

Step 4: Notify tax agencies and settle any remaining taxes

In Indiana, you don’t need to obtain a tax clearance certificate before dissolving your business, but you must send a copy of the articles of dissolution to the Department of Revenue and the Department of Workforce Development at:

Indiana Department of Revenue
Enforcement
Division/Dissolutions/MS-104
100 N. Senate Ave. Rm. N241
Indianapolis, IN 46204

Indiana Department of Workforce Development
Employer Audit Section
10 N. Senate Ave.
Indianapolis, IN 46204

Your current bookkeeper or a tax expert should be able to inform you if you owe any local, state, or federal taxes that you need to settle. You should also file Form 966 to notify the IRS that you are ending your business.

Businesses should also close their INTIME tax accounts by sending an Indiana Business Tax Closure Request (Form BC-100) to the Indiana Department of Revenue to avoid new estimated tax bills:

Indiana Department of Revenue
Customer Service
P.O. Box 6197
Indianapolis, IN 46206-6197

Depending on your business situation, you may also need to settle any upcoming employee taxes or outstanding pay.

Step 5: File articles of dissolution with the Indiana Secretary of State

To formally dissolve your Indiana LLC, you need to submit the completed articles of dissolution to the Secretary of State. You can submit it online through the INBiz portal or through the mail using Form 49465.

Filling out the form is easy. You will need to include:

• The name of the LLC;
• The date of formation;
• The date of dissolution;
• The address of the primary business office, and
• A witness’s signature.

If you are sending the form by mail, you will also need to include a $30 check made payable to the Indiana Secretary of State. Online submissions are only $20 and are handled through the INBiz portal.

Send the completed form to:

302 West Washington Street
Room E-018
Indianapolis, Indiana 46204

Conclusion

No matter why you decided to dissolve your Indiana LLC, it is natural to have mixed feelings after all your hard work. But, it is crucial to understand that you will move on and continue your entrepreneurial journey with more knowledge and experience than before. Whether it is through forming a new company or even revoking your dissolution and restarting your former LLC, the possibilities are endless.

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