How to Dissolve an Arizona LLC

Closing an Arizona LLC is not a single act. It is a two-phase process: first the members dissolve the company and wind up its affairs, and only after the winding up is finished does the LLC file its Articles of Termination with the Arizona Corporation Commission. Skip a step or take the steps out of order and the members can end up personally exposed for debts the company should have paid.

This page collects the two guides you need to do it right. The first, How to Terminate an Arizona LLC: a Step-by-Step Guide, walks through the legal side: how to get the required member vote, what governs when your Operating Agreement says nothing about dissolution, the order in which creditors and then members must be paid, what winding up actually involves, and how and when to file the final Articles of Termination.

The second, Federal Tax Consequences of Terminating an AZ LLC, covers the bill that comes due when the company closes. What you owe depends entirely on how the IRS classifies your LLC. A multi-member LLC taxed as a partnership liquidates under Subchapter K, where distributed property must be valued and “hot assets” can convert what you expected to be capital gain into ordinary income. An LLC taxed as a C corporation faces double taxation on liquidation; one taxed as an S corporation avoids the second layer of tax but still recognizes gain on appreciated assets. Every dissolving LLC, whatever its classification, must file a final federal tax return and clear its remaining tax obligations before the doors close for good.

To hire us to dissolve your LLC: submit our LLC Termination Questionnaire.