How to Dissolve an LLC in Wyoming

Basics of LLC dissolution

Dissolving an LLC in Wyoming means that you are permanently shutting down your business. Your company will no longer have a legal structure and will cease to exist. If the state dissolved your LLC administratively, you have two years to reinstate it, but you’ll need to follow the state’s reinstatement procedures and pay all required fees.

LLC dissolution

There are three basic steps to LLC dissolution in Wyoming. First, review your Wyoming operating agreement, if you have one, for its dissolution rules. Wyoming doesn’t require a written agreement (an operating agreement can be oral or implied), and if yours is silent, state default rules apply. The second step is to close accounts and contact creditors to make sure all bills are paid before the LLC dissolves. The final step is to submit the Articles of Dissolution form to Wyoming’s Secretary of State. Once the Secretary of State approves the dissolution application, your business is formally dissolved.

Types of LLC dissolution

There are three main reasons for LLC dissolution. These are administrative dissolution, judicial dissolution, and voluntary dissolution.

Administrative dissolution

If your LLC doesn’t file its annual report and pay the license tax, or doesn’t keep a registered agent, the Secretary of State sends a notice. If you don’t fix the problem within 60 days, the LLC forfeits its articles of organization and is administratively dissolved.

If you’re thinking about using administrative dissolution as an alternative to voluntary dissolution, you may want to reconsider the move. Administrative dissolution is a lot simpler than voluntary dissolution as you don’t have to fill out paperwork, submit dissolution forms, etc. However, your reputation could take a hit if you go this route. You won’t have full control over the dissolution process as the Wyoming Secretary of State will decide the date on which your business shuts down for good. Your LLC keeps its name for two years, during which you can reinstate it. Reinstatement costs $100 when the LLC was dissolved for unpaid taxes or $350 when it had no registered agent, plus any overdue license tax.

Judicial dissolution

A judicial dissolution means that a court has ordered your LLC to dissolve. Under W.S. 17-29-701, the grounds include:

• A member asks the court to dissolve the LLC because its activities are unlawful, or because it’s not reasonably practicable to carry on the business under its articles and operating agreement.
• A member or dissociated member asks the court to dissolve the LLC because the managers or controlling members have acted illegally, fraudulently or oppressively in a way that harms the applicant.

If your LLC is dissolved by the court, you won’t have a full say in how the company is wound up and assets are distributed.

Voluntary dissolution

In a voluntary LLC dissolution, all the LLC members agree to dissolve the business (unless your operating agreement sets a different rule). Once you’ve voted in favor of dissolving the business, you’ll start the dissolution process, which ends with submitting Articles of Dissolution to the Wyoming Secretary of State. Some reasons for a voluntary dissolution include:

• Desire to engage in other financial activities, such as getting a job at a large company or starting a new business venture.
• Lack of finances.
• The company’s purpose has been completed. This applies to LLCs that were formed to accomplish a short-term goal.
• LLC members don’t agree on the long-term course of action for the business.

Dissolving your LLC in Wyoming

There are a number of steps you need to take to dissolve your LLC in Wyoming.

Step 1: Vote to dissolve the LLC

You only need to vote on dissolving the LLC if it’s a voluntary dissolution. Judicial and administrative dissolutions don’t require a vote.

Single vs. multi-member LLC dissolution

If you operate a single-member LLC, you don’t need to hold a meeting, vote, or take minutes. You simply follow the state’s LLC dissolution process and the dissolution rules outlined in the LLC operating agreement.

If you have two or more members, record the members’ consent to dissolve the LLC in writing and keep it with your business records.

Dissolution rules in your LLC operating agreement

The LLC operating agreement should have clear rules outlining how to handle issues such as the division of assets, cancelation of contracts, and handling of debts. Follow these rules, or amend the agreement with the members’ consent.

Wyoming-specific rules for voting to dissolve your LLC

In some states, you can dissolve an LLC by majority vote if your operating agreement allows for it. However, in Wyoming, a unanimous vote is required to dissolve an LLC, unless your operating agreement says otherwise.

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

Once you vote to dissolve the LLC, you need to wind up your business operations. This includes:

• Notifying your registered agent.
• Notify customers of your decision to close. This notification should include your closure date and information about returns, redeeming coupons, etc.
• Canceling recurring business licenses and permits
• Dealing with employees.
• Closing bank accounts.
• File a final tax return and pay any taxes that are due.
• Filing articles of dissolution with the Secretary of State.

Step 3: Notify creditors and claimants about your LLC’s dissolution, settle existing debts, and distribute remaining assets

Wyoming law lets you send known creditors a written notice of your LLC’s dissolution (W.S. 17-29-703). The notice must say what a claim must include and give a mailing address for claims. It must also set a deadline at least 120 days after the creditor receives the notice, and state that claims not received by the deadline are barred. A creditor whose claim you reject has 90 days to sue.

Wyoming law doesn’t require that you notify the public of the dissolution of your LLC. However, it’s still a good idea to put an ad in the local newspaper announcing your LLC dissolution and providing information for potential claimants to file a claim for outstanding debts. If you publish a notice once in a newspaper in the county of your principal office, claims not brought within three years after publication are barred (W.S. 17-29-704). It’s not uncommon for LLCs to have unknown claimants file claims for outstanding debts, and such claims are best processed as early in the dissolution process as possible.

Step 4: Notify tax agencies and settle remaining taxes

You’ll need to notify state agencies that you’re dissolving your LLC and cancel your accounts. Wyoming has no state income tax, so these include:

• Your sales and use tax account with the Wyoming Department of Revenue
• Your unemployment insurance and workers’ compensation accounts with the Department of Workforce Services (if your LLC had employees)

If there are pending tax bills, you’ll need to pay these before dissolving your LLC. File your final federal return (Form 1065 for a multi-member LLC, or Schedule C on your personal return for a single-member LLC) and check the “final return” box.

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

Filing articles of dissolution with the Wyoming Secretary of State is one of the easiest aspects of LLC dissolution. The form asks for the LLC’s exact name and a certification that the LLC has completed dissolution and winding up under W.S. 17-29-701. Your LLC must be active and in good standing to file. The fee is $60, paid by check or money order.

Mail the form with your payment. Processing takes up to 15 business days after the Secretary of State receives your filing. After filing, you can check your LLC’s status online.

Conclusion

It’s never easy to shut down a business that you invested money, time, and hard work in building. Thankfully, Wyoming is a business-friendly state that makes it as easy as possible to set up and dissolve an LLC. What’s more, the experience you gain from running an LLC and the network you built as a local business owner are valuable assets that you’ll never lose. Remember that the lessons you learned and the experiences you gained can empower you to reach your new career goals.

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