How to Dissolve a Business in Oklahoma | Essential Steps

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Dissolve Oklahoma LLC

Deciding to dissolve a Limited Liability Company can be difficult for business owners. Still, it is sometimes necessary due to changes in the business landscape, financial challenges, or personal reasons. Dissolving a business requires specific steps and regulations to complete the process correctly and legally. This comprehensive guide will teach you how to dissolve a business in Oklahoma.

Webinarcare Editorial Team will help you easily dissolve your business. You must be guided by all the factors gathered in this article.

How to Dissolve a Business in Oklahoma

If you are starting an LLC in Oklahoma, having an operating agreement is one of the key requirements in dissolving a business. Before starting the legal paperwork, there are a few things to remember. Initially, confirm that all LLC members agree with closing the business. Once everyone is ready, voting should be used to document everyone’s assent. They must vote in favor of the dissolution before the legal procedure may begin. The procedures for the dissolution are listed below.

How to Dissolve a Business in Oklahoma

Dissolving a business in Oklahoma requires following specific steps to ensure a smooth and legally compliant process. The process usually includes the following steps:

Step 1: Make the Decision

Before dissolving your business, ensure this decision is right for your Oklahoma business. Consider discussing the decision with your business partners, members, or legal counsel to weigh the pros and cons and determine if dissolving the business is best.

Step 2: Hold a Formal Vote

Once you’ve decided to dissolve your Oklahoma business, you’ll need to hold a formal vote among the members to approve the dissolution. This step is important because it ensures that all members know and agree to the decision to dissolve the business.

To hold a formal vote:

  • Review your Oklahoma Operating Agreement to determine the required voting procedures, such as the percentage of affirmative votes needed for approval.
  • Notify all Oklahoma members of the upcoming vote and give them sufficient time to review the matter and make an informed decision.
  • Conduct the vote according to the procedures outlined in your operating agreement.
  • Record the vote results in your business meeting minutes or a written resolution.

If most members approve the dissolution, you can proceed with the dissolution process.

Get a Professional Service

It’s important to get legal assistance when dissolving an LLC. With that, you must have a Registered Agent. Ensure that the Registered Agent you choose is qualified and legal since they will file the Article of Dissolution for your LLC. We reviewed the Best Registered Agent Services in Oklahoma for you to check out.

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Step 3: Settle the Outstanding Debts and Liabilities

You must settle all outstanding debts and liabilities before dissolving your Oklahoma business. This includes paying off loans, settling pending lawsuits, paying owed taxes, and fulfilling any remaining contractual obligations. You can inform your Oklahoma Business Attorney to ensure it is settled.

To settle your Oklahoma business’ debts and liabilities:

  • Review your business’ financial records to identify all outstanding debts and liabilities.
  • Contact creditors, lenders, and other parties to whom your business owes money or obligations, and arrange for payment or settlement.
  • If your business does not have sufficient funds or assets to cover all outstanding debts and liabilities, consult with legal counsel to determine the best course of action for settling these obligations.

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Step 4: Distribute the Remaining Assets to Members

Once all debts and liabilities have been settled, you can distribute any remaining assets to the business members. Your operating agreement should do this or, if no such agreement exists, in proportion to each member’s ownership interest in the business.

To distribute assets:

  • Determine the fair market value of the remaining assets, such as real estate, equipment, or inventory. 
  • Calculate each member’s ownership interest in the business based on the operating agreement or their initial capital contribution.
  • Distribute the assets to each member according to their ownership interest.
  • Keep detailed records of all asset distributions for tax and legal purposes.

Step 5: File the Articles of Dissolution

After settling debts and distributing assets, you’ll need to file the Articles of Dissolution with the Oklahoma Secretary of State to dissolve your Oklahoma business officially. This document provides the state with notice that your business is ceasing operations and will no longer conduct business.

To file the Articles of Dissolution:

  1. Obtain the appropriate form from the Oklahoma Secretary of State‘s website. Visit the Oklahoma Secretary of State’s website and navigate to the Business Services section to find the necessary forms and instructions.
  2. Fill out the Articles of Dissolution Form with the required information, including your Oklahoma business name, the date of dissolution, and any other necessary details.
  3. Pay the filing fee of $25 in the Oklahoma Secretary of State’s office.
  4. Submit the completed form and payment to the Oklahoma Secretary of State’s office, either by mail or online, depending on your Oklahoma’s filing options.

Once your Articles of Dissolution have been processed and approved, your Oklahoma business will officially be dissolved.

Mail to: 
Oklahoma Secretary of State
Oklahoma Secretary of State, 421 N.W. 13th Suite 210, Oklahoma City, OK 73103

Filling Fee:
$25

Step 6: Notify the IRS and Government Agencies

After dissolving your business with the Oklahoma Secretary of State, you’ll need to notify the Internal Revenue Service (IRS) and other Oklahoma government agencies of the dissolution. This is important to ensure your business complies with tax laws and other regulations.

To notify the IRS of the dissolution:

  1. File your final federal tax return using Form 1065 and check the box indicating that it is the final return for your business.
  2. Cancel your Employer Identification Number (EIN) in Oklahoma by mailing a letter to the IRS at the address where you filed your tax return. Include your EIN, business name, and reason for cancellation in the letter.
  3. Update your Oklahoma business status with any other relevant government agencies, such as the Oklahoma Department of Revenue, Department of Labor, and local licensing and permitting offices.

Step 7: Cancel Licenses, Permits, and Insurance Policies

To fully dissolve your Oklahoma business, you’ll need to cancel any business licenses, permits, and insurance policies associated with your business. This may include Oklahoma Business Licenses, professional licenses, sales tax permits, and any other permits required for your industry.

You must contact the issuing agency to cancel your licenses and permits and follow their specific cancellation procedures. You should also contact your insurance provider to cancel any remaining business insurance policies. With the cancellation of the mentioned licenses, permits, and Business Insurances in Oklahoma, you also need to remove a Registered Agent since he won’t be able to continue filing documents for your business unless you are the Registered Agent of your business. 

Step 8: Maintain Records of the Dissolution Process

For legal and tax purposes, it’s important to maintain detailed records of the steps taken to dissolve your Oklahoma business. This includes documentation of the formal vote to dissolve the business, debt settlements, asset distribution records, and copies of filed state and federal tax returns.

Keep these records for at least seven years, as they may be needed in the event of an IRS audit or other legal issues arising from the dissolution.

Cost of Dissolving an LLC in Oklahoma

The cost of dissolving an LLC in Oklahoma can vary based upon various factors. The Oklahoma Articles of the Dissolution filing fee cost $25. Other costs include any outstanding taxes or debts the business owes and potential costs for settling business contracts or selling business assets.

It’s also important to factor in professional fees, such as if you hire an attorney or accountant to assist with the dissolution process. After the LLC is dissolved, the remaining company assets are divided among the members. The exact breakdown of these costs can often be complex and will depend on the specific circumstances of the LLC, so consulting with a legal or financial advisor can be helpful.

Reasons Why an LLC in Oklahoma Dissolves

There are numerous reasons why an LLC in Oklahoma dissolves, and these reasons could impact other LLCs. It is best to understand the why’s and how to deal with it rather than knowing that your LLC may dissolve sooner or later. Here is the list of possible reasons why an LLC dissolves.

  1. Expired Duration: In Oklahoma, an LLC will automatically dissolve if it reaches the end of its defined duration stated in the Articles of Organization.
  2. Member Vote: An LLC may dissolve in Oklahoma if the members vote for dissolution. Usually, the LLC Operating Agreement outlines the percentage of member votes required to dissolve the LLC.
  3. Judicial Dissolution: A court in Oklahoma may order the dissolution of an LLC if it is in the best interests of the members, especially in cases of fraud, illegal activities, or oppressive behavior.
  4. Bankruptcy: If the LLC becomes insolvent and cannot pay its debts, it may be forced into bankruptcy. This usually leads to the dissolution of the LLC.
  5. Non-compliance: If the LLC does not comply with state laws or fails to meet legal requirements, such as filing annual reports or paying taxes, the state may forcibly dissolve the LLC.
  6. Merger or Consolidation: If the LLC in Oklahoma merges or consolidates with another company and the LLC is not the surviving entity, it will be dissolved.
  7. Death or Withdrawal of a Member: Unless specified otherwise in the Operating Agreement, the death, withdrawal, bankruptcy, or incompetence of a member may cause the LLC to dissolve.

Please note that the process for dissolution typically includes settling all business debts, distributing any remaining assets among the members, and filing a formal notice of dissolution with the Oklahoma Secretary of State.

After the Oklahoma LLC Dissolution

Once your Oklahoma business has been dissolved, it typically cannot be reinstated or “taken back” after a few years. Instead, you would need to form a new LLC in Oklahoma if you wish to operate a business under a limited liability company structure again.

To create a new Oklahoma LLC, you would need to follow the standard formation process, which generally includes the following:

  • Choosing a Unique Business Name: Ensure that another business does not already use the name you choose in Oklahoma and complies with state-specific naming requirements.
  • Appointing a Registered Agent: Designate a Registered Agent who will be responsible for receiving legal correspondence on behalf of your LLC.
  • Filing Articles of Organization: Submit the Articles of Organization with the Oklahoma Secretary of State’s office, along with the required filing fee.
  • Creating an Operating Agreement: Draft an agreement outlining the rules and regulations governing your new LLC, including member roles, ownership percentages, and management structure.
  • Obtaining Necessary Licenses and Permits: Apply for any required business licenses, permits, and tax registrations with the appropriate state and local authorities.
  • Registering with the Internal Revenue Service (IRS): Obtain an Employer Identification Number (EIN) from the IRS, which will be necessary for tax purposes and other business activities.

Availability of the Business Name

When a business is in Oklahoma was dissolved, the business name becomes available for other business owners to use after a certain period. However, the specific rules and regulations regarding the availability of a dissolved business name can vary. Keep in mind that even if the name becomes available, other factors, such as trademarks or potential confusion with existing businesses, may still impact the ability of another business owner to use the name.

FAQs

How do I dissolve my Oklahoma LLC business?
You can dissolve your Oklahoma LLC business by filing articles of dissolution with the Secretary of State’s office.
What do I need to include in the articles of dissolution for my Oklahoma LLC?
In your articles of dissolution for your Oklahoma LLC, you need to include your business name, the date of dissolution, and the reason for dissolution.
What is the fee for filing articles of dissolution for an Oklahoma LLC?
The fee for filing articles of dissolution for an Oklahoma LLC is $50.
How long does it take for my Oklahoma LLC to be officially dissolved?
It typically takes two to three business days for your Oklahoma LLC to be officially dissolved after your articles of dissolution have been processed.
Do I need to notify the Oklahoma tax agency when dissolving my LLC?
Yes, you need to notify the Oklahoma tax agency when dissolving your LLC.
How do I notify the Oklahoma tax agency when dissolving my LLC?
You can notify the Oklahoma tax agency when dissolving your LLC by filing the appropriate tax forms.
Are there any outstanding taxes that need to be paid before dissolving my Oklahoma LLC?
Yes, all outstanding taxes and fees must be paid before dissolving your Oklahoma LLC.
Will I owe taxes directly related to dissolving my Oklahoma LLC?
No, you should not owe any taxes directly related to dissolving your Oklahoma LLC.
How do I settle outstanding debts and obligations of my Oklahoma LLC when dissolving it?
You should settle outstanding debts and obligations of your Oklahoma LLC when dissolving it according to the terms of the agreements you have in place.
Can I dissolve my Oklahoma LLC over the phone or online?
No, you can only dissolve your Oklahoma LLC by filing articles of dissolution in person or by mail.
Do I need to receive unanimous consent from all members before dissolving my Oklahoma LLC?
Yes, you typically need to receive unanimous consent from all members before dissolving an Oklahoma LLC.
What happens to my Oklahoma LLC’s assets when I dissolve it?
When you dissolve your Oklahoma LLC, any remaining assets will be distributed among the LLC’s members.
Can I dissolve my Oklahoma LLC if it’s in good standing with the state and ongoing, profitable business operations?
Yes, you can dissolve your Oklahoma LLC if it’s in good standing with the state and if it has ongoing, profitable business operations.
What happens to my Oklahoma LLC’s debt when I dissolve it?
When you dissolve your Oklahoma LLC, any outstanding debts will need to be settled before the LLC can officially be dissolved and its remaining assets distributed.
Can I dissolve my Oklahoma LLC to avoid paying outstanding debts?
Dissolving an Oklahoma LLC to avoid paying outstanding debts is not a legal option.
Can I dissolve my Oklahoma LLC if my record-keeping and documentation is incomplete?
No, you should not dissolve your Oklahoma LLC if your record-keeping and documentation is incomplete, as this may result in audits, payments, and liabilities in the future.
Can I reverse the dissolution of my Oklahoma LLC?
Yes, you can reverse the dissolution of your Oklahoma LLC if you act quickly and have unanimous member consent.
Can another corporation or an individual sue my Oklahoma LLC after it’s dissolved?
Yes, another corporation or an individual can sue your Oklahoma LLC after it’s dissolved if the lawsuits are related to activities or actions initiated when the LLC was still operating.
What happens if I don’t dissolve my Oklahoma LLC and simply rely on the non-payment of its annual fees?
If you fail to dissolve your Oklahoma LLC and don’t pay its annual fees, your LLC may fall into bad standing with the state, eventually leading to suspension, administrative dissolution, or even revocation under non-operative Oklahoma LLC regulations, and this may unearth legal implications.
How long does it take for the state to dissolve an Oklahoma LLC that has been administratively dissolved?
It takes approximately 90 days for the state to dissolve an Oklahoma LLC that has been administratively dissolved.
Can I operate another LLC business after I dissolve my Oklahoma LLC?
Yes, it is possible to operate another LLC business after you dissolve your Oklahoma LLC.
Can I use the same name for my new LLC that I used for my dissolved Oklahoma LLC?
You may not be able to use the same name for your new LLC that you used for your dissolved Oklahoma LLC. Consult your registered agent for clarifications.
Can I form a new Oklahoma LLC right after dissolving one?
Yes, you can form a new Oklahoma LLC right after dissolving one.
Do I need to pay a fee to revive my administratively dissolved Oklahoma LLC?
Yes, you need to pay a fee to revive your administratively dissolved Oklahoma LLC as well as any outstanding taxes and fees.
What happens if I fail to dissolve my Oklahoma LLC ethically and legally?
If you fail to dissolve your Oklahoma LLC based on ethical, legal, or tax regulations, you may incur significant liabilities related to applications, obligations, and taxes.
What are the legal procedures for dissolving a non-operative Oklahoma LLC?
The state can dissolve a non-operative Oklahoma LLC by serving it notices — typically two yearly — before eventually moving on for administrative dissolution and participating in alerts from governmental notices.
Will dissolving my Oklahoma LLC affect my personal credit score?
Dissolving your Oklahoma LLC should not directly impact your personal credit score.
What should I do if I have further questions about dissolving my Oklahoma LLC?
If you have further questions about dissolving your Oklahoma LLC, contact your registered agent, local tax agency or secretary of state’s office.
How do I dissolve my Oklahoma LLC?
You can dissolve your Oklahoma LLC by filing Articles of Dissolution with the Oklahoma Secretary of State.
What information do I need to include in my Articles of Dissolution?
Your Articles of Dissolution should include your LLC’s name, your name and address, and the reason for dissolution.
How much does it cost to dissolve an LLC in Oklahoma?
It costs $50 to file Articles of Dissolution in Oklahoma.
Can I dissolve my Oklahoma LLC online?
Yes, you can file your Articles of Dissolution online through the Oklahoma Secretary of State’s website.
How long does it take to dissolve an LLC in Oklahoma?
Once your Articles of Dissolution are filed, it usually takes around 3-5 business days to process.
Do I need to notify the Oklahoma Department of Revenue when dissolving my LLC?
Yes, you should notify the Oklahoma Department of Revenue and make sure all taxes are paid before dissolving your LLC.
Can I dissolve my Oklahoma LLC if it has outstanding debts?
Yes, you can dissolve your LLC even if it has outstanding debts, but you are still responsible for paying off those debts.
What happens if I don’t dissolve my Oklahoma LLC and just let it go inactive?
If you don’t dissolve your Oklahoma LLC and it is still technically active, you will still be responsible for filing tax returns and paying fees.
Do I need to file a final tax return when dissolving my Oklahoma LLC?
Yes, you should file a final tax return for your Oklahoma LLC when dissolving it.
Can I dissolve my Oklahoma LLC if it has pending legal actions against it?
Yes, you can dissolve your Oklahoma LLC even if it has pending legal actions against it, but you may still be liable for any judgments.
Can I reinstate my Oklahoma LLC after it has been dissolved?
Yes, you can apply for reinstatement with the Oklahoma Secretary of State as long as it is within two years of dissolution and any outstanding fees or taxes are paid.
Is there a penalty for late filing of Articles of Dissolution in Oklahoma?
No, there is no penalty for late filing of Articles of Dissolution in Oklahoma.
How do I notify my Oklahoma LLC’s creditors of its dissolution?
You should notify your LLC’s creditors of its dissolution and provide contact information for any future claims.
Can I dissolve my Oklahoma LLC if it has employees?
Yes, you can dissolve your Oklahoma LLC even if it has employees, but you must follow proper termination procedures.
Can I dissolve my Oklahoma LLC if it has multiple members?
Yes, you can dissolve your Oklahoma LLC even if it has multiple members, but all members must agree to the dissolution.
Are there any special requirements for dissolving a foreign LLC in Oklahoma?
No, the process is the same as dissolving a domestic LLC. You must file Articles of Dissolution with the Oklahoma Secretary of State.
Can I change my Oklahoma LLC’s name when I dissolve it?
No, you cannot change your Oklahoma LLC’s name when filing Articles of Dissolution.
Can I dissolve my Oklahoma LLC if it has not yet started operating?
Yes, you can dissolve your Oklahoma LLC if it has not yet started operating and has no debts or liabilities.
Do I need to cancel my Oklahoma LLC’s business license when dissolving it?
Yes, you should cancel your Oklahoma LLC’s business licenses and permits when dissolving it.
What if my Oklahoma LLC has been involuntarily dissolved by the state?
You should seek legal advice and take steps to reinstate your Oklahoma LLC.
Can a creditor object to the dissolution of an Oklahoma LLC?
Yes, a creditor can object to the dissolution of an Oklahoma LLC, but they must do so within 120 days of filing the Articles of Dissolution.
Can I dissolve my Oklahoma LLC if it is in bankruptcy?
No, you cannot dissolve an Oklahoma LLC in bankruptcy. You must first obtain approval from the bankruptcy court.
How do I distribute assets in a dissolved Oklahoma LLC that has no operating agreement?
The assets will be distributed in accordance with the Oklahoma LLC Act, which gives equal distributions to all members.
Can I dissolve my Oklahoma LLC if it has pending or active lawsuits?
Yes, you can dissolve your Oklahoma LLC even if it has pending or active lawsuits.
What happens to my Oklahoma LLC’s tax ID number when it is dissolved?
Your Oklahoma LLC’s tax ID number may still be used to file final tax returns, but it will eventually be deactivated.
Can I convert my Oklahoma LLC into a different business entity when dissolving it?
No, you cannot convert your Oklahoma LLC into a different business entity when dissolving it. You must form a new entity if you wish to do so.
Can I dissolve my Oklahoma LLC if it has multiple branches outside of Oklahoma?
Yes, you can still dissolve your Oklahoma LLC if it has branches outside of Oklahoma, but you should follow proper procedures for each state or jurisdiction where you do business.
What is the difference between cancellation and dissolution of an Oklahoma LLC?
Cancellation refers to ending your LLC’s registration in Oklahoma, while dissolution refers to ending its existence as a legal entity altogether.

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Conclusion

Dissolving Oklahoma business can be complex and time-consuming, but following the steps outlined in this guide will help ensure a smooth and successful dissolution. By conducting a formal vote, settling debts and liabilities, distributing assets, filing the Articles of Dissolution, notifying government agencies, and canceling business licenses and permits, you can legally dissolve your Oklahoma business and move forward with the next chapter of your professional life.

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