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By Omer Aydin ·
To dissolve an LLC you do three things in order: wind up the business (pay debts, distribute what's left), close out taxes (final federal and state returns), and file the termination document with the state — a Certificate of Cancellation in Delaware ($200) or Articles of Dissolution in Wyoming ($60). Skipping the state filing is the expensive mistake: an abandoned Delaware LLC keeps accruing $300 franchise tax plus penalties every year, and an abandoned Wyoming LLC slides into administrative dissolution with your name still attached to its records.
Here is the full sequence for both states, what each filing requires, and what happens if you simply stop paying.
| Walk away | Dissolve properly | |
|---|---|---|
| Delaware | $300 tax + $200 penalty + interest accrue yearly; certificate canceled after 3 unpaid years | One $200 filing ends all obligations |
| Wyoming | Administrative dissolution after missed annual reports | One $60 filing ends cleanly |
| Liability shield during wind-down | Murky — creditors can argue the entity was abandoned | Preserved through formal wind-up |
| Banking/credit footprint | Entity lingers in "delinquent" status on records | Closed in good standing |
Administrative dissolution feels like the state doing your paperwork for free. It isn't: it happens after penalties, leaves a delinquent record, and doesn't formally cut off claims the way a proper wind-up does.
Follow your operating agreement's dissolution clause — typically written consent of all members (or the threshold the agreement sets). Document the decision in writing even as a single member; it dates the start of wind-up.
Wind-up legally limits the LLC to concluding affairs: finish or assign contracts, notify clients, vendors, and your landlord, and stop taking new obligations. Notify known creditors — doing so starts claim clocks running and protects members during distribution.
The statutory order matters: creditors first (including taxes), then member loans, then remaining assets to members per the operating agreement. Distributing to members while creditors are unpaid can make members personally liable for the shortfall — the one genuinely dangerous mistake in dissolution.
Business licenses, sales-tax permits, DBAs, foreign-state registrations, payment processors, and finally the bank account (after the last checks clear). If the LLC is registered as a foreign entity in other states, withdraw there too — those states also keep billing otherwise.
Total real cost to exit Delaware: $200 + any outstanding taxes. Compare that with $500+ per year of neglect and the filing pays for itself by June 1.
Wyoming's process mirrors its general posture: cheap and short. The wind-up obligations above are still on you; the filing certifies you did them.
Delaware: $200 for the Certificate of Cancellation, plus all outstanding franchise taxes — the state won't process the filing until the $300/year obligations are settled. Wyoming: $60 for Articles of Dissolution, with annual reports current.
The $300 keeps accruing each June 1, plus a $200 penalty and 1.5% monthly interest per missed year; good standing is lost immediately, and after three unpaid years Delaware cancels the certificate. The debt doesn't vanish with the entity's standing — filing the $200 cancellation now is always cheaper.
You must address them in the wind-up: pay them, settle them, or make provision for them before distributing anything to members. Distributing assets ahead of creditors is how members lose the liability shield in dissolution. If debts exceed assets, take advice — that's insolvency territory, not a form-filing exercise.
Send the IRS a letter closing the business account after the final return is filed. The EIN is never reassigned to anyone else; closing the account simply stops IRS notices to a dead entity. Keep the EIN records — old filings reference it.
The state filings themselves process on standard state timelines (Delaware also offers expedited handling). The wind-up — final invoices, tax returns, account closures — is what sets the calendar, typically spanning one tax cycle.
If there's a realistic chance you'll use it again, a dormant Wyoming LLC at $60/year usually beats dissolving and re-forming (new EIN, new bank account, new history). Dormant Delaware at $300/year is harder to justify — dissolve or domesticate to Wyoming instead.
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