Grow Your Legal Practice (/advertisers)

Meet the Editors (/staff.html#editorbios)

How to Dissolve an LLC in Texas

Find out how you can go about dissolving an LLC in Texas.

(http://www.nolo.com/products/online-llc-TCCLLCUS.html?utm_campaign=llc-banner&utm_medium=htmlcontainer&utm_source=nolo-content&utm_content=image)

By David M. Steingold (/Law-Authors/David-Steingold.Html), Contributing

Author
(https://plus.google.com/share?
url=http%3A%2F%2Fwww.nolo.com%2Flegalencyclopedia%2Fhow-dissolve-llctexas.html)
(https://www.facebook.com/sharer/sharer.php?
u=http%3A%2F%2Fwww.nolo.com%2Flegalencyclopedia%2Fhow-dissolve-llc-texas.html)

Sign In (/login)

Support (/customer-support)

RELATED PRODUCTS
more (https://www.nolo.com/products/businessformation)

Form Your Own

Limited Liability
Company

LLC or Corporation?

Nolo's Guide to
Single-Member
LLCs

Nolo's Quick LLC

(http://www.nolo.com/products/llcor-corporation(http://www.nolo.com/products/formchent.html?
your-own-limitedutm_source=nololiability-companycontent&utm_medium=nolo&utm_campaign=nololiab.html?
relatedutm_source=noloproducts&utm_content=pid|355103||pa|Limited
content&utm_medium=nolo&utm_campaign=noloLiability
relatedCorporation||ref_src|https%3A%2F%2Fwww.google.com%2F||ref_url|w
products&utm_content=pid|355103||pa|Limited
encyclopedia%2FhowLiability
dissolve-llcCorporation||ref_src|https%3A%2F%2Fwww.google.com%2F||ref_url|www.nolo.com%2Flegaltexas.html||sku|CHENT6)
encyclopedia%2Fhowdissolve-llctexas.html||sku|LIAB9)

Closing your Texas limited liability company (LLC) will involve a variety of tasks. Among
the most important are what is known as winding up and terminating the business.

Initial Notes
Texas is different from pretty much every other state in the country in that, for almost all
practical purposes, it has no separate LLC Act. Instead, as of January 1, 2010, Texas
limited liability companies are mainly governed by the Texas Business Organization
Code (BOC), as are all Texas corporations, non-prot corporations, and partnerships.
Also, portions of the BOC covering the winding up of domestic entities have been
revised, with the revisions becoming effective September 1, 2013. This article is based
on the revised statute.
Because of the particular complexities of Texas law regarding the termination of Texas
business entities, you should not rely solely on this article, but instead are advised to
seek expert assistance from a knowledgeable Texas business attorney.

Triggering the Winding Up of Your LLC

(http://www.nolo.com/products/nolosquick-llc-llcq.html?
(http://www.nolo.com/products/nolosutm_source=nologuide-to-singlecontent&utm_medium=nolo&utm_campaign=nolomember-llcsrelatedsmlc.html?
products&utm_content=pid|355103||pa|Limited
utm_source=noloLiability
content&utm_medium=nolo&utm_campaign=noloCorporation||ref_src|https%3A%2F%2Fwww.google.com%2F||ref_url|w
relatedencyclopedia%2Fhowproducts&utm_content=pid|355103||pa|Limited
dissolve-llcLiability
texas.html||sku|LLCQ8)
Corporation||ref_src|https%3A%2F%2Fwww.google.com%2F||ref_url|www.nolo.com%2Flegalencyclopedia%2Fhowdissolve-llctexas.html||sku|SMLCEB)

By way of ocially closing your Texas LLC, you will need to initiate a series of nal tasks
that collectively are known as winding up the company. While an LLC may be required
to wind up involuntarily by a court decree, or may be involuntarily terminated by the
Secretary of State for failure to le annual reports, here we are concerned with
voluntarily winding up of the LLC through formal actions by LLC members. In states with
LLC Acts, the action that directly precedes, and leads into, winding up a company, such
as a formal vote by the LLC members, is routinely called dissolution. The BOC,
however, tends to avoid the word dissolution, as well as references specically to
LLCs, and instead speaks more generally of various possible events that would
require the winding up of a Texas business entity.
To initiate the process of voluntarily winding up your LLC, you rst should look to your
companys organizational documentsthe certicate of formation and the operating
agreement. In most cases, and notwithstanding the BOCs avoidance of the term, one
of those two documents will contain a section with rules for how to dissolve the
company, or otherwise take action to require winding up. One typical approach would
be to require a vote of the LLC members on a resolution to start winding up, and a
requirement that some percentage or number of members vote in favor of the
resolution. Make sure you follow any specic procedural requirements that may be part
of these rules, such as setting a specic time to meet and vote, and giving advance
notice to all members regarding the meeting.
You should also be aware that, regardless of whether your certicate of organization or
operating agreement contains any dissolution provisions, the BOC allows for an
alternative event that would require winding up: a majority vote of all of the LLC
members.
If and when you do initiate the winding up process, based either on rules in
organizational documents or on majority member vote, you should make sure to record
the decision in the ocial minutes of the relevant member meeting or on a written
consent form.

Winding-up Tasks
Under Texas law, after taking action to trigger the winding up of your LLC, the company
must cease carrying on business except to the extent necessary to wind up. Various
sections of the BOC mention various winding up tasks applicable to an LLC, including:
sending a written notice of the winding up to each known claimant against the LLC
collecting and selling LLC property to the extent the property is not to be distributed
in kind to LLC members
applying and distributing LLC property to discharge, or make adequate provision for
the discharge of, all of the LLCs liabilities and obligations (this includes liabilities and
obligations owed to LLC members other than distributions)
after discharging, or making adequate provision to discharge, all LLC liabilities and

LAWYERS IN YOUR AREA

(http://www.nolo.com/lawyers/prole/warrenv-norred-5266.html)
Norred Law, PLLC
(http://www.nolo.com/lawyers/prole/warrenv-norred-5266.html)
TX
Contact Oce
(/path2/min-path4?
direct_nid=2194973&practice_area=12&surl=1)

(http://www.nolo.com/lawyers/prole/hclinton-milner-pllc)
H. Clinton Milner, PLLC
(http://www.nolo.com/lawyers/prole/hclinton-milner-pllc)
Contact Oce
(/path2/min-path4?
direct_nid=2958121&practice_area=12&surl=1)

(http://www.nolo.com/lawyers/prole/jonesallen-fuquay-llp)
Jones, Allen & Fuquay,
L.L.P.
(http://www.nolo.com/lawyers/prole/jonesallen-fuquay-llp)
Contact Oce
(/path2/min-path4?
direct_nid=3025681&practice_area=12&surl=1)

(http://www.nolo.com/lawyers/prole/vernonduray-llp)
Vernon & Duray, L.L.P.
(http://www.nolo.com/lawyers/prole/vernonduray-llp)
TX
Contact Oce
(/path2/min-path4?
direct_nid=2951241&practice_area=12&surl=1)

obligations, distributing the remainder of the LLCs property to the members

according to their respective rights and interests
prosecuting or defending lawsuits; and
performing any other act required to wind up the LLCs business and affairs.
Regarding the fourth listed item, distributing to LLC members any remaining assets after
paying off all debts, you should review your operating agreement to learn about
members respective rights and interests. More generally, if you have questions about
any of these tasks, you should seek assistance from a qualied attorney.

Tax Clearance
When you have completed winding up your LLC, you must le a certicate of
termination (discussed just below). However, you must rst obtain a certicate of
account status (Form #05-305) from the Comptroller of Public Accounts (CPA)
indicating that all necessary taxes have been paid and your LLC is in good standing for
the purpose of termination. To obtain the required certicate, you must le Form 05359 (Request for Certicate of Account Status) with the CPA. You can nd the request
form, along with other relevant information, on the CPA website
(http://www.window.state.tx.us/). It will take 4-6 weeks for the CPA to process your
request. Once you receive your certicate of account status, you will need to attach it to
your certicate of termination.
For federal tax purposes, check the nal return box on your IRS Form 1065 (if your LLC
is classied as a partnership for tax purposes), or on your IRS Form 1120 (if your LLC is
classied as a corporation for tax purposes).

Certicate of Termination
After you have wound up your company and obtained your certicate of account status
from the CPA, you must le a certicate of termination with the Secretary of State
(SOS). According to the BOC, the certicate must include:
your LLCs name
the name and address of at least one LLC manager if manager-managed, or each
managing member if member-managed
your LLCs le number assigned the Secretary of State
the nature of the event requiring winding up (such as approval of a voluntary
decision to wind up the LLC); and
a statement that your LLC has complied with the provisions of the BOC governing its
winding up.
In addition, the instructions for the certicate of termination form available from the SOS
state that you should provide the effective date for the certicate, which may be: (a) the
ling date; (b) a date not more than 90 days from the date the certicate is signed; or (c)

(http://www.nolo.com/lawyers/prole/lawoces-gene-f-stevens)
Law Oces of Gene F.
Stevens
(http://www.nolo.com/lawyers/prole/lawoces-gene-f-stevens)
TX
Contact Oce
(/path2/min-path4?
direct_nid=2304213&practice_area=12&surl=1)
Grow Your Practice (http://www.nolo.com/advertisers/join2)

RELATED ADS

File a Trademark
Apply for a Trademark in
Minutes. Lifetime
Customer Support.

the date of the occurrence of a specied future event. The SOS instructions also state
that the form should be signed by an authorized manager if your LLC is managermanaged, or an authorized managing member if your LLC is member-managed.
Remember: you must attach your certicate of account status to your certicate of
termination (see the SOS instructions for more details).
There is a $40 fee to le the certicate. Your ling usually will be processed within 3-5
business days. The certicate of termination form (Form 651) including instructions is
available for download from the SOS website. There is also an option to le the
certicate of termination online (this requires that you have an image of your certicate
of account status saved on your computer that you can upload to the SOS website).
Be aware that your business name will become available for use by others once your
certicate of termination is processed.

Note on Out-of-State Registrations

Is your LLC registered or qualied to do business in other states? If so, you must le
separate forms to terminate your right to conduct business in those states. Depending
on the states involved, the form might be called a termination of registration, certicate
of termination of existence, application of withdrawal, or certicate of surrender of right
to transact business. Failure to le the additional termination forms means youll
continue to be liable for annual report fees and minimum business taxes.

Additional Information
You can nd additional information, such as forms, mailing addresses, instructions for
online ling, and ling fees, on the SOS website (http://www.sos.state.tx.us/). For
information on dissolving and winding up LLCs formed in other states, check Nolos 50state series on dissolving LLCs (http://www.nolo.com/legal-encyclopedia/how-dissolvellc-your-state.html).
Winding up and terminating your LLC is only one piece of the process of closing your
business. For further, general guidance on many of the other steps involved, check
Nolos 20-point checklist (http://www.nolo.com/legal-encyclopedia/checklist-closingbusiness-20-things-29027.html) for closing a business and the Nolo article on what you
need to know (http://www.nolo.com/legal-encyclopedia/closing-business-what-youneed-30264.html) about closing a business.
Finally, as noted above, if you have any detailed questions about the winding up and
termination procedures in Texas, you should consult with a local attorney.

July 2013
(https://plus.google.com/share?
url=http%3A%2F%2Fwww.nolo.com%2Flegalencyclopedia%2Fhow-dissolve-llc-

texas.html)
(https://www.facebook.com/sharer/sharer.php?
u=http%3A%2F%2Fwww.nolo.com%2Flegalencyclopedia%2Fhow-dissolve-llc-texas.html)

Find a Lawyer

Legal Information & Products

Need a lawyer? Start here.

BusinessFormation
(http://www.nolo.com/legalencyclopedia/llc
corporationspartnerships)

Practice Area:
Business
Zip Code: 75206
SEARCH
HOW IT WORKS
Briey tell us about your case
Provide your contact information
Connect with local attorneys

Choose Your Business Structure

(http://www.nolo.com/legalencyclopedia/business-structures)
Limited Liability Companies - LLCs
(http://www.nolo.com/legalencyclopedia/limited-liability-company)
Partnerships (http://www.nolo.com/legalencyclopedia/partnership)
Sole Proprietorships
(http://www.nolo.com/legal-encyclopedia/soleproprietor)
Forming a Corporation
(http://www.nolo.com/legalencyclopedia/forming-corporation)
Running a Corporation
(http://www.nolo.com/legalencyclopedia/running-corporation)

PopularProductsfromNolo

Online LLC
Formation

LLC or
Corporation?

Guide to
SingleMember
(http://www.nolo.com/products/online(http://www.nolo.com/products/llcLLCs
llcortccllcus.html)

corporationchent.html)

(http://www.nolo.com/products/nolosguide-tosinglemember-llcssmlc.html)

Copyright2016Nolo(http://www.nolo.com/copyrightpolicy.html)

Security&Privacy(http://www.internetbrands.com/privacy/privacyhighlights.html)

CookiePolicy(http://www.internetbrands.com/privacy/cookiepolicy.html)

Terms&Conditions(http://www.internetbrands.com/ibterms/)

DisclaimerLegalinformationisnotlegaladvice(http://www.internetbrands.com/ibterms/supplementallegalterms/)