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CalAttorney2, Attorney
Category: Business Law
Satisfied Customers: 10244
Experience:  I am a businesses law attorney, with experience advising and representing owners and investors.
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I want to dissolve my Nevada LLC. But I still have payments

Customer Question

Hi - I want to dissolve my Nevada LLC. But I still have payments to make to a few contractors that I'll be paying out through year end. Do I need to keep my LLC active through year end to make those payments, or can I shut down the LLC now and still pay out those individuals later?Is there any benefit to closing the LLC sooner or does it not really matter one way or the other?Thanks.
Submitted: 10 months ago.
Category: Business Law
Expert:  CalAttorney2 replied 10 months ago.

Hello, My name is ***** ***** I will assist you today. Please give me a few minutes to write a response and identify any additional resources for you.

Expert:  CalAttorney2 replied 10 months ago.

If you reach an agreement with your creditors (the contractors you still have obligations to) so that you agree to be personally liable for the remaining debts (you already plan to pay them out), there will likely be no problem - this only requires that you enter into an agreement with them so that they can pursue you for the obligation if they are not paid as opposed to an LLC that is no longer active/solvent. (Failing this, in winding down your LLC, they would each have claims against the LLC and would be able to assert those against assets of the LLC - which would slow or stop the process).

Regarding benefits of leaving the LLC open through the end of the year or closing it now - there really isn't much of an advantage/disadvantage to this at this time (if you are going to close it at the end of the year this is going to keep you within the same tax year so there is not going to be any spillover into next year anyway, your tax filings will remain the same, and there will not be any additional filing obligation).
However, if you do close the LLC and make the payments on the obligation yourself, this can potentially create some additional accounting complications as you are paying out the expenses of your LLC individually as opposed to on your business' behalf - depending on how your LLC's taxes are panning out this year, this may have an impact on your after tax returns (your tax accountant or tax attorney is the one that is going to help you make this determination).

Customer: replied 10 months ago.
Thanks. I know there is a business license tax each year on the anniversary of the formation of the LLC. I formed the LLC at the end of the year. Is there any way to avoid paying that if I close it out sooner?I also saw this on employee taxes: We have one employee. Could we avoid those by closing earlier?Thanks,Katie
Expert:  CalAttorney2 replied 10 months ago.

If you dissolve prior to your LLC's anniversary date, that would allow you to avoid that particular tax.

If you are no longer employing that employee (you can begin closing your LLC including terminating employees) prior to the formal dissolution.

(I do recommend working with a good business tax advisor to help you with this dissolution plan (they can help you do this as strategically as possible - this can be a tax attorney, or a CPA that has experience with businesses/corporations - but your end goal is going to be maximizing your "after tax return" meaning helping you get the most money in your pocket after you close the business - and they can help you do this by looking into your specific business' portfolio and finances.).

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