In recent years, New Jersey’s economy has gone through significant improvements, which made it an excellent place to be a business owner. But that doesn’t necessarily mean that every endeavor was or will be successful.
You might’ve taken a chance at business ownership in the Garden State, but your efforts haven’t been very fruitful. In that case, it may be time to cut your losses before you lose too much money.
How can you close an NJ business effectively? Keep reading to find out how to dissolve an LLC in NJ.
Get Unanimous Member Approval
Before beginning the dissolution process, it’s crucial to ensure that all members of the LLC agree to dissolve the company.
This typically involves holding a formal meeting where members vote on the decision to dissolve. The vote should be documented in the LLC’s records, such as meeting minutes or a resolution.
Compliance Check
Before moving on with an NJ LLC dissolution, first make sure it’s in good standing with the state. This includes confirming that all necessary filings (such as annual reports) have been submitted and that all state taxes have been paid up to date.
Any outstanding compliance issues should be resolved before proceeding with dissolution. A revoked or voided LLC won’t be eligible for this process; it’ll need to be reinstated before doing so.
Tax Clearance
Obtain a Tax Clearance Certificate from the New Jersey Division of Taxation. This certificate confirms that all state taxes have been paid or that the LLC is exempt from such taxes.
You may need to complete and submit a separate application for tax clearance, along with any required documentation or payments.
Publish Notice
In New Jersey, you’re required to publish a notice of dissolution in a newspaper. This notice must be published once a week for two consecutive weeks.
Check the specific requirements and approved newspapers with the New Jersey Division of Revenue to ensure compliance.
Notify Creditors and Close Accounts
Notify creditors and vendors, terminate leases, and close business accounts. You should provide creditors with the relevant contact information for any further inquiries or claims.
Also, settle any outstanding debts or obligations by contacting any other parties with whom the LLC is involved with.
File Final Tax Returns
File final federal, state, and local tax returns for the LLC. This includes income tax returns, sales tax returns, and any other applicable tax filings.
Make sure all of your LLC’s tax obligations are settled before finalizing the dissolution.
Cancel Permits and Licenses
Cancel any permits, licenses, or registrations that the LLC holds with the state or local authorities. This may include business licenses, professional licenses, zoning permits, or any other regulatory approvals obtained for the operation of your business.
Notify Employees and Partners
Next, inform employees, partners, contractors, and other stakeholders about the decision to dissolve your LLC. Provide them with information about the timeline for dissolution, their rights and responsibilities during the process, and any relevant termination procedures.
Having clear and open communication is crucial during this period. If you aren’t able to handle inquiries, make sure you assign someone who can.
Dispose of Assets
Determine how the LLC’s remaining assets will be distributed among the members, either according to the terms of the company’s operating agreement or state law. This may involve selling assets, paying off liabilities, and distributing any remaining funds or property to members in accordance with their ownership interests.
File the Certificate of Dissolution
After all the necessary steps have been completed, you can then submit the Certificate of Dissolution form to the New Jersey Division of Revenue. This is the official document that formally terminates the existence of the LLC in New Jersey.
You can find the form for NJ Certificate of Dissolution (Form C-105C; without assets) online on their site or obtain it from their office. You can also use Form A-5033-TC, which is the Procedure for Dissolution, Cancellation, or Withdrawal.
Complete the form accurately, providing details about the LLC, its members, and the reason for dissolution. Then, submit it along with any required fees.
Create a Filing Cover Letter
If you opt for snail mail or hand-delivering your documents instead of digital filing, you’ll have to include a filing cover letter.
The following is what you need to include in your cover letter:
- Your full name or the name of the firm filing for you
- Method of payment (credit card, direct deposit, or check)
- Description of your filing
- LLC’s name
- LLC’s business ID
If you’re filing in person, then you’ll have to pick expedited or same-day processing. For snail mail, include a return address on the envelope.
Use the State’s Online Business Endings and Cancellation Service
An alternative is to use the state’s Online Business Endings and Cancellation Service. As the name suggests, it’s an entirely digital process, which means it’s easy and convenient.
To dissolve your LLC through this site, you’ll need its business entity number and filing date. Keep in mind that your company must be in good standing for dissolution, so before that can happen, you may need to file all missing annual reports.
Maintain Your Records
Keep thorough records of all dissolution-related documents, transactions, and communications for future reference. You should hold onto copies of filed forms, notices sent to creditors, meeting minutes, financial statements, and any other relevant paperwork.
These records may be needed to address any future inquiries, claims, or legal matters related to the dissolution.
Know How to Dissolve an LLC in NJ
Now you know how to dissolve an LLC in NJ, and it’ll certainly be useful if you’re considering closing up shop.
Getting through the dissolution quickly and easily will make the transition to a new company less painful. And as a result, you can focus all your energy on creating something better and more rewarding.
After closing a business in NJ, you might want to start a new one. In that case, sign up with Business Anywhere, and we can set up a new LLC in either NJ or one of the other 49 states.
