How to Voluntarily Dissolve a Multi-Member LLC in New Hampshire: Timelines & Required Filings
To formally dissolve a multi-member LLC in New Hampshire, members must vote according to the operating agreement, file Form LLC-7 with the Secretary of State, and pay the $35 filing fee. Shutting your doors without filing leaves members liable for taxes and annual fees.
Understanding Voluntary Dissolution in New Hampshire
Many business owners mistakenly believe that simply stopping operations and closing their doors is enough to shut down a multi-member LLC. However, New Hampshire law requires a formal statutory dissolution to officially terminate the entity's existence. Failing to complete this process leaves the LLC active, meaning members continue to accrue the $100 annual report fee and remain potentially liable for unresolved business debts. A proper dissolution protects the members from future liabilities and officially notifies creditors that the business is closing.
Step-by-Step Process in New Hampshire
Whether your LLC is operating out of Manchester, Nashua, or Concord, the process for voluntarily dissolving a multi-member limited liability company follows the same statewide procedures governed by the New Hampshire Revised Limited Liability Company Act.
Step 1: Drafting a Dissolution Resolution Under RSA 304-C
The first crucial step is obtaining the required consent from the LLC members. According to N.H. Rev. Stat. Ann. § 304-C:129, an LLC is dissolved upon the occurrence of an event specified in the operating agreement or by the affirmative vote of the members. You must hold a formal meeting and draft a written resolution to dissolve the company. The importance of clear, documented member consent cannot be overstated. In cases like McDonough v. McDonough, 169 N.H. 537 (NH Supreme Court 2016), disputes over dissolution highlight why adhering strictly to the operating agreement is essential to avoid lengthy litigation.
Step 2: The Winding Up Period Explained
Once the resolution is passed, the LLC enters the winding-up phase. As outlined in N.H. Rev. Stat. Ann. § 304-C:127, the business cannot carry on any new activities except those appropriate to wind up and liquidate its affairs. During this time, the designated managers or members must pay off all known creditors, sell business assets, and distribute any remaining funds to the members based on their ownership percentages. It is highly recommended to send written notices to all known creditors regarding the impending closure.
Step 3: Obtaining Tax Clearance
Before the state accepts your final dissolution paperwork, you must ensure that all state tax obligations are satisfied. You need to request a tax clearance certificate from the New Hampshire Department of Revenue Administration, Concord. To do this, you must file Form AU-22, New Hampshire, New Hampshire Department of Revenue Administration, Certification Request Form. The DRA will verify that your Business Profits Tax and Business Enterprise Tax are paid in full. Only after issuing this clearance can you finalize the closure.
Step 4: Filing the Certificate of Cancellation
The final legal step is submitting the official dissolution document to the New Hampshire Secretary of State, Corporation Division, Concord. You must complete and file Form LLC-7, New Hampshire, New Hampshire Secretary of State, Certificate of Cancellation. This form requires the exact name of the LLC, the reason for dissolution, and the effective date. It must be signed by an authorized manager or member.
Secretary of State Filing Fees and Processing Times
Dissolving a multi-member LLC involves standard state fees. The statutory fee for Form LLC-7 is $35, and submitting Form AU-22 to the DRA requires an additional $30 fee. If you want to ensure the dissolution process is handled correctly and shield yourself from future liability, consider browsing our US Lawyer Directory to find an experienced local attorney in New Hampshire who can manage these filings for you. Attorney fees for handling a standard dissolution generally range between $500 and $1,500.
How Long Does the Process Take?
The timeline for a voluntary dissolution in New Hampshire typically hinges on the tax clearance process. Processing Form AU-22 with the DRA can take up to 60 days. Once you receive your tax clearance, filing the Certificate of Cancellation online through the state's portal usually takes 5 to 10 business days for standard processing.
Frequently Asked Questions (FAQ)
Do we need unanimous consent from all members to dissolve?
Generally, New Hampshire law defaults to requiring the consent of members holding a majority of the voting rights, but your specific operating agreement may dictate a different threshold, such as a supermajority or unanimous vote.
What happens if we do not file the Certificate of Cancellation?
If you fail to file Form LLC-7, your LLC remains active in the state system. You will continue to be liable for the $100 annual report fee, and the state will eventually dissolve the business administratively.
Can a dissolved LLC be reinstated in New Hampshire?
If an LLC was administratively dissolved by the state for failing to file annual reports, it can typically apply for reinstatement. However, a voluntary dissolution finalized by filing a Certificate of Cancellation is generally permanent.
Do we need to notify the IRS when dissolving the LLC?
Yes. You must file a final partnership return using Form 1065, check the Final Return box, and notify the IRS to close the Employer Identification Number (EIN) account.
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