Are there any disadvantages to dissolving an LLC that will never be used again?
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Are there any disadvantages to dissolving an LLC that will never be used again?
I am going through a divorce and I am the sole member of the LLC (my ex-husband and I were managing members but I have a court ordered stipulation that I now have sole custody, care and control of the LLC) and I want to dissolve it so that there are no problems for me down the line with any prior association with my ex-husband. Are there any problems with doing this or any reasons I should wait?
Asked on June 15, 2011 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
There is no real disadvantage to disolving an unnecessary LLC, other than the time and any payments required to do so. On the other hand, dissolving it offers several advantages--no continuing reporting or tax obligations, no chance that it will *somehow* incur liability (e.g. knowing you never pay attention to it, someone orders stuff or enters into a contract in its name), etc. About the only downside would be that if you *might* need an LLC in the near future, it would be more convenient and slightly less costly to use an existing one than create a new one--so if you think you may need an LLC, you might wish to keep it intact. Otherwise, there's no reason to not dissolve it, and several reasons why you should.
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