How to Dissolve an LLC in Oklahoma

Basics of LLC Dissolution

Dissolution starts the end of your LLC. A dissolved Oklahoma LLC keeps existing only to wind up its affairs, and its separate existence ends once its articles are canceled and winding up is finished.

LLC Dissolution

Dissolution is the process that ends your LLC’s existence as a business. When it’s done properly, it helps protect you from future liabilities relating to your business operations. LLC dissolution can be initiated by the member or members, or it can be directed by the courts, and the State of Oklahoma can cancel an LLC that stops filing its annual certificates. In any case, it removes your company’s independent legal status with the Oklahoma Secretary of State. It tells the State of Oklahoma and everybody else that your LLC no longer operates in the state.

Types of LLC Dissolution

LLC dissolution in Oklahoma can be voluntary or involuntary. Involuntary endings happen by court order (judicial dissolution) or by cancellation for missed annual certificates.

Cancellation for missed annual certificates

If your LLC doesn’t file its $25 Annual Certificate with the Oklahoma Secretary of State within 60 days of the due date, it stops being in good standing. If the certificate or fee is three years overdue, Oklahoma treats the LLC’s articles of organization as canceled. You can apply for reinstatement by filing the missing certificates and paying the fees.

Judicial dissolution

A member can ask the district court to dissolve the LLC when it’s not reasonably practicable to carry on the business under the articles of organization or operating agreement. A deadlock between members or serious misconduct are examples of situations that can lead to this.

Voluntary dissolution

Voluntary dissolution takes place when an LLC’s members choose to terminate the business. There are a couple ways this could happen:

• The operating agreement may contain language that triggers dissolution in specified situations, such as the death of a member.
• Members can vote to dissolve the LLC. Unless the articles of organization or a written operating agreement say otherwise, Oklahoma requires the written consent of all members.

Dissolving Your LLC in Oklahoma

Here are the steps you are required to follow to voluntarily dissolve your Oklahoma LLC:

Step 1: Vote to dissolve the LLC

Some Articles of Organization or operating agreements specify triggers that will mandate dissolution. An example is the death of a member. If this is the case, no vote is necessary, and you can proceed to the next step.

The operating agreement may state that the LLC can be dissolved by a majority vote of the owners. However, if the documents don’t address this topic, a unanimous vote in writing is required to voluntarily dissolve an LLC in Oklahoma.

Single vs. multi-member LLC dissolution

A single member LLC can be voluntarily dissolved by the decision of the lone member. If an LLC has more than one member, there must be a vote. Depending on the operating agreement, dissolution may require a unanimous vote or merely a majority vote. If the agreement is silent, the written consent of all members is required.

Dissolution rules in your LLC operating agreement

Your Oklahoma LLC operating agreement should contain rules about dissolution. These ought to cover not only whether a unanimous vote is required but also how the LLC will discharge its liabilities, close out its business activities, and divide its remaining assets among its members. Anything not specified is governed by the laws of the State of Oklahoma.

Step 2: Create a written resolution

This document, created by the LLC and signed by the members, states that the LLC will cease operations, pay its creditors, distribute assets to its members, and go out of existence. Oklahoma’s default rule requires written consent of all members, so a signed resolution or written consent documents the decision.

Step 3: File articles of dissolution with the Secretary of State

Once the members have consented, file a form called Articles of Dissolution of an Oklahoma Limited Liability Company with the Oklahoma Secretary of State. File it with the Secretary of State online or by mail.

The form requires the name of the LLC, the date its articles of organization were filed, the reason for dissolution, and the effective dissolution date (if it’s different from the date the form is received). The form must be signed by a manager, be dated, and list the signer’s name and address.

Filing (the $50 fee includes the certificate of cancellation) puts the public on notice. The LLC continues only to finish winding up.

Step 4: Wind up all business affairs and handle any other business matters

After dissolution, the LLC can only carry on activities needed to wind up its business. An LLC can’t just close down shop in a day and stop doing business, so it has to methodically wind up various aspects of its business operations. These actions can include:

• Cancel business licenses and permits
• Notify suppliers and customers of the date when business operations will cease
• Finalize payroll and employee matters
• Prepare to close business bank accounts
• Clear out remaining merchandise and/or wind down providing services
• Notify your registered agent

If there are any pending lawsuits, these will have to be resolved.

Step 5: Notify creditors and claimants about your LLC’s dissolution, settle existing debts and distribute remaining assets

Notify creditors and known claimants. Oklahoma’s LLC Act doesn’t set a formal notice procedure, but the LLC must pay creditors, or make adequate provision for paying them, before distributing anything to members. If the LLC has debts, such as credit card debt or bank loans, these have to be taken care of first.

Your LLC provides you with protection from personal responsibility for its liabilities, and you may dissolve your LLC if it is losing money. However, the LLC must give all creditors the opportunity to collect any amounts that they are owed. Failure to resolve outstanding debts could possibly compromise liability protection and expose members to personal liability for these balances.

Once all debts are satisfied, the LLC must sell any remaining assets and distribute the proceeds to the members. The operating agreement will often dictate how the assets will be divided. If it doesn’t, Oklahoma’s default order is unpaid distributions, then return of members’ contributions, then remaining profit shares.

Step 6: Notify Tax Agencies and settle remaining taxes

You must let several authorities know that you will no longer be doing business and paying taxes:

• Oklahoma Tax Commission. You must inform this agency that you are dissolving. Close your sales tax, withholding and other tax accounts so returns and penalties don’t keep accruing.
• IRS. There are several documents you must file with federal tax authorities.
• Oklahoma Employment Security Commission. You must inform this agency that you are winding down and will no longer have employees.

Conclusion

Some people dissolve an LLC because they have been in the business as long as they want, and they’re ready to retire or to seek new opportunities. Other dissolutions come about because of disagreement between the members or lack of business success. In any case, dissolving something that you put so much of yourself into can be an emotionally fraught process.

Filing the Articles of Dissolution makes it official, and the winding-up work that follows finishes the job. Actually making the decision to shut down may be the hardest part of the process. We have detailed the steps you need to take between that decision and the work that definitively puts your LLC in Oklahoma to rest.

Before you wrap it all up, take a moment to congratulate yourself on the risk you took, the business you built, and the experience you gained. Good luck with whatever comes next!

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