How to dissolve an LLC in Ohio, in the right order

What does it take to dissolve an LLC in Ohio?

Dissolving an Ohio LLC takes one state filing, Form 616, and a wind-up that you mostly handle yourself. The Secretary of State charges $50 for the certificate under ORC 111.16(N). Everything else is closing accounts the state, the IRS, and your city opened when you started.

Closing the doors does not close the company. An LLC stays active on the Secretary of State's record until a certificate of dissolution is filed. Until then, it can still be sued, the state still expects a statutory agent, and tax agencies still expect returns from every open account.

ORC 1706.471 sets out what dissolution means. A dissolved LLC continues to exist, but only to wind up its affairs. It may collect what it is owed, pay or provide for its debts, and distribute what remains. It may not take on new business. Dissolution also does not stop lawsuits by or against the company, and it does not end the authority of its statutory agent.

This guide is the do-it-yourself path. If you would rather hand off the state filing, we can dissolve your Ohio LLC for you: we prepare and file Form 616 for $75 plus the state fee. Tax returns stay with you and your accountant either way.

Which Ohio dissolution form do you file, and what does it cost?

A domestic Ohio LLC files Form 616, Certificate of Dissolution. It replaced the older Form 562, so throw away any blank copy you saved years ago. Other entity types use their own forms, all at the same $50 state fee.

The tax clearance column surprises people. The Ohio Department of Taxation says domestic for-profit corporations must get a Certificate of Tax Clearance before they dissolve, under ORC 1701.86(H)(2), by sending Form D5. It also says LLCs are not affected by that requirement. An LLC still has to file its final returns. It just does not need a clearance certificate in hand before Form 616.

A company formed in another state does not dissolve in Ohio. It cancels its Ohio registration and dissolves at home. Our guide to withdrawing a foreign LLC from Ohio covers Form 618.

Step 1: Approve the dissolution the way Ohio law and your agreement require

Start with a written approval. ORC 1706.47 lists the events that dissolve an Ohio LLC, and the common one is the consent of all the members. The others are an event your operating agreement names, a court order, the passing of 90 consecutive days with no remaining member, and a long-canceled LLC whose members consent.

Read your operating agreement before you vote. Many agreements set their own dissolution triggers, a buyout process for a member who wants out, or a notice period. If yours names an event and that event has happened, the LLC has dissolved whether or not anyone signs anything.

Put the approval in writing, signed by every member, with the date and the effective date you intend. A one-page written consent is enough for most small LLCs. Keep it with the company records. It is the proof, later, that the people who closed the company had the authority to do it.

Step 2: Stop taking new work and tell the people who deal with you

Once the members approve, the LLC may only wind up. Finish or hand off jobs in progress, stop taking new orders, and tell customers, vendors, your landlord, your insurer, and your bank. Cancel automatic payments that would keep charging a closed company.

Do not cancel insurance too early. A general liability or professional policy can matter for claims that arrive after the last job. Ask your agent what coverage you need while you wind up and whether a tail or extended reporting period makes sense for your line of work.

Step 3: File Form 616, Certificate of Dissolution, with the Secretary of State

File Form 616 with the Ohio Secretary of State and pay the $50 fee. You can file online through Ohio Business Central or by mail. Regular processing on Secretary of State forms is listed at 3 to 7 business days, and expedited processing is available for an added state fee.

What the certificate says

ORC 1706.471(B)(1) lists the contents of a certificate of dissolution:

• The LLC's name and its registration number on the Secretary of State's record.
• A statement that the LLC has dissolved.
• An effective date, if you do not want it effective on filing. It must be a date certain and cannot be earlier than the filing date.
• A copy of the notice the LLC will publish to claimants under ORC 1706.474(A).
• Anything else the LLC considers proper.

An authorized person signs. Do not put a Social Security number or EIN on the form. Check the name and registration number against the state record with an Ohio business search before you file, since a mismatch is the most common reason a filing comes back.

When to file it

Some owners file Form 616 right after the vote and wind up afterward. That works because the dissolved LLC keeps existing for the wind-up. Others finish collecting and paying first, then file. Filing early starts the creditor notice process sooner and makes the dissolution visible on the public record. Ask your accountant whether the timing changes anything on your final returns.

Step 4: Give notice to creditors and claimants

Ohio gives a dissolved LLC two ways to cut off claims, and both are optional. Using them gives the members a firm date after which most claims are barred.

Known claims: a 90-day deadline

Under ORC 1706.473, the LLC may send written notice to people with known claims. The notice identifies the company, says what a claim must include, gives a mailing address, and sets a deadline at least 90 days after the notice takes effect. A claim not received by that deadline is barred. If the LLC rejects a claim, the claimant has 90 days after the rejection notice to sue or the claim is barred.

Unknown claims: publication and a two-year cutoff

Under ORC 1706.474, the LLC may publish notice of its dissolution and ask anyone with a claim to present it. If the LLC has a website, it posts the notice there and sends it to the Secretary of State, who posts it on the state's site. Claims from people who got no direct notice, and contingent claims, are barred unless a lawsuit starts within two years after publication. The Secretary of State keeps a searchable list of dissolved LLCs with their notices.

These notices are the most legal part of the process. If the company has disputed debts, a pending lawsuit, or product or workmanship exposure, have an attorney draft them.

Step 5: File final tax returns and close each Ohio tax account

Every account the LLC opened stays open until you close it, and an open account expects returns. The Department of Taxation's own Business Account Update Form says sales tax and withholding accounts are closed through OH|TAX eServices, one account at a time. Work through this list with your accountant.

Federal returns

• A single-member LLC reports its last year on the owner's Schedule C, E, or F. A multi-member LLC files a final Form 1065 and checks the final return box. An LLC taxed as an S corporation files a final Form 1120-S.
• If you had employees, pay final wages, make final deposits, file a final Form 941 and Form 940, and give W-2s.
• File any required 1099 information returns for contractors paid in the closing year.
• Once every return is filed and paid, write to the IRS to close the business account. The IRS says it will not close the account until all returns are filed and all taxes paid.

Our guides to Ohio LLC taxes and the Ohio commercial activity tax explain each account if you are not sure which ones your LLC opened.

Step 6: Close the BWC policy and the ODJFS unemployment account

If the LLC ever had employees, two more agencies need to hear from you. Ohio's own close-a-business checklist names both.

• Ohio Bureau of Workers' Compensation: cancel the policy. The state warns that if you do not, you may keep getting billed and face penalties. Report final payroll so the premium is trued up.
• Ohio Department of Job and Family Services: deactivate the unemployment tax account in The SOURCE, the state's online unemployment tax system. Ohio Administrative Code 4141-11-07 says the final report is the required quarterly reports, plus notice of why the report is final and the date the business stopped operating.

Do this after the last payroll, not before. Cancelling the policy while someone is still on the clock leaves that person, and the company, uncovered.

Step 7: Pay debts, then distribute what is left to the members

ORC 1706.475 sets the order. The LLC first pays its debts, or sets aside enough to cover them, including debts owed to members who are creditors. Then members get back contributions that have not been returned. Anything left is split the way the members shared distributions before dissolution.

The order protects the members. A member who receives a distribution while a creditor goes unpaid can be on the hook later. Under ORC 1706.474(D), a claim that is not barred can be enforced against a member, up to what that member received after dissolution. Pay or reserve for the debts first, and keep a record of every payment.

Close the bank account last, after the final checks clear and any tax refunds arrive.

Step 8: Cancel licenses, keep the records, and decide when to end the agent

Cancel professional and local licenses, permits, and any trade name registered to the LLC. Remove the business from directories and your website so customers stop calling a company that no longer exists.

Keep the records. The IRS says to keep employment tax records for at least four years. Keep the signed approval, the filed Form 616, the creditor notices, and the final returns somewhere you can find them years from now.

The statutory agent matters during wind-up. Lawsuits, tax notices, and claims keep arriving after the vote, and ORC 1706.471 says dissolution does not end the agent's authority. Keep a working agent at least until the creditor deadlines run. Our Ohio statutory agent service is $49 a year, and we can stop billing once your wind-up is done.

Doing it yourself or getting help

A single-owner LLC with no employees, no debts, and no open disputes can usually dissolve on its own in an afternoon of paperwork. Sign a consent, file Form 616 online, file the last Schedule C, and close the vendor's license if you had one.

Bring in an accountant when the LLC had payroll, sales tax, or CAT accounts, or holds assets that will be distributed. Bring in an attorney when there are unpaid creditors, a pending lawsuit, a member who will not sign, or exposure to future claims from past work. If the LLC was already canceled by the state for missing an agent, read our guide on Ohio LLC reinstatement first, since the path to a clean dissolution may run through reinstatement.

If you want the state filing handled, our Ohio LLC dissolution service prepares Form 616 from your approval, files it, and puts the filed certificate in your portal. Questions go to (877) 908-6122, Monday to Friday, 9:00 AM to 5:00 PM ET.