That's right; you'd be doing away with the legal entity. But, you can continue the business of the company in another name.
Dissolving the company is essentially a paperwork process. You'll have to pass a resolution to dissolve and fill out and file some forms with your state's Secretary of State.
You should be able to have a local attorney do this for you.
Here is a brief outline of how it works:
Examine your assets. If you have partners, meet with them and list everything your company owns. The amount of debt your company has will determine how much cash your owners will walk away with. Make a list of all real estate, owned office furniture, computer equipment, bank account balances, stocks, bonds---anything of cash value. Make another list of all of your debts.
Propose a formal dissolution. As an owner, you must write a formal request to have your company dissolved. This is commonly called a "Formal Corporate Action." This will simply be a written statement detailing the agreement of all interested parties, such as board of directors and owners of your company, the company will be dissolved. Keep this handy. You may be required to file it with your state.
File dissolution paperwork with your state. After you've formally agreed to dissolve your LLC, contact your secretary of state to obtain the proper dissolution forms. Depending on your state, this package will consist of three to ten pages and is commonly called a "Limited Liability Company Certificate of Dissolution." Complete each form thoroughly. Make sure all owners sign each document where required (see Resources). There may be a small process fee of $15 to $20, depending on your state.
File proper IRS forms. Complete an IRS Form 966, the Corporate Dissolution and Liquidation document. When you divide your assets, you may be subject to additional income taxes by filing this form. Contact an attorney or CPA before sending this document back to the IRS. You may also be subject to additional requirements from the IRS, depending on the size of your LLC.
Send notice to your creditors. You creditors must know where to reach you after you've dissolved your company. Have your attorney or accountant write a Statutory Notice to your creditors, explaining to each that you are in the process of dissolving your LLC. Your letter should also explain that you are attempting to settle your account with each creditor. Include an address, telephone number and email address where creditors can reach you. Work with each creditor on arrangements to pay them back.
Liquidate your assets. After you've filed the proper LLC paperwork and suitably communicated with your creditors, refer to your list of assets and decide how you will liquidate them. List real estate for sale with an experienced realtor. Make calls to people you know that may be interested in buying your furniture and computer equipment. Classified ads in newspapers and trade magazines are also good ways to sell business furniture and machines. Divide all cash accounts among partners. Contact your CPA or financial planner before liquidating stocks, bonds or annuities. You may be subject to income taxes based on the sale of a business. The government may also require you to pay your creditors before you may access the proceeds of your asset liquidation.