How to Dissolve an LLC in Delaware: A Comprehensive Guide

Ending a business is never easy. But sometimes, it’s the right move. Whether you’re winding down due to shifting markets, a new opportunity, or simply time to move on, dissolving your Delaware LLC properly is essential.

At Starcycle, we know this process can feel overwhelming. That’s why we’re breaking it down into clear, actionable steps. With the right information and a solid plan, you can close this chapter smoothly and make space for whatever comes next.

This guide explains everything you need to know to legally and completely dissolve a Delaware LLC, in clear language, and in the right order.

What Does It Mean to Dissolve a Delaware LLC?

In Delaware, closing an LLC involves three key stages:

• Dissolution: The official decision to close the business.
• Winding Up: Settling the LLC’s affairs, like paying debts and distributing assets.
• Cancellation: Filing the proper paperwork with the state to legally end the LLC’s existence.

Each stage is important. Skipping any step can leave you personally responsible for taxes, fees, or unresolved claims down the line.

Step 1: Review Your Operating Agreement

Start by checking your LLC’s Operating Agreement. This document may already have specific rules for how to dissolve the company. It might outline:

• Who needs to vote or agree
• How the decision should be documented
• What order to handle final tasks

Step 2: Get Member Approval

If your Operating Agreement doesn’t mention dissolution, Delaware law steps in. You’ll need approval from members who hold at least two-thirds of the LLC’s ownership interests.

Once you have approval:

• Document it in writing
• Include signatures if possible
• Keep the consent with your internal business records

For single-member LLCs, this step is simple—you just make the decision yourself and document it.

Step 3: Start the Winding-Up Process

Once the decision is made, you can’t conduct regular business anymore. From here on, your activities should focus only on closing out the company’s affairs. This is known as winding up.

Winding up includes:

• Paying off debts Prioritize all creditors. That includes business loans, vendor invoices, leases, and any other unpaid bills.
• Settling taxes Pay all outstanding federal, state, and local taxes, including Delaware Franchise Tax. You can’t cancel your LLC without doing this.
• Distributing assets After all debts are paid, remaining money or property is split among members. This is done according to your Operating Agreement. If there’s no clear rule, Delaware law says assets should be distributed based on each member’s share of the company.
• Canceling business accounts and permits Close business bank accounts, shut down any websites or tools, and cancel business licenses or permits.
• Informing stakeholders Let your customers, vendors, and partners know the business is closing. Notify employees and file any necessary final paperwork for payroll or benefits.
• Withdrawing from other states If your LLC was registered to do business in other states, you’ll need to file separate withdrawal forms there too.

This step may take a few weeks or even months, depending on how complex your business is. Don’t rush—closing things down properly now saves trouble later.

Step 4: File the Certificate of Cancellation

Once the LLC has been fully wound up, it’s time to file the Certificate of Cancellation with the Delaware Division of Corporations. This is the document that legally ends your LLC.

Here’s what you’ll need to do:

• Fill out the Certificate of Cancellation form. You can find it on Delaware’s official site or request it by contacting the Division of Corporations.
• Include:
  • The exact name of the LLC
  • The date the LLC was formed
  • The effective date of cancellation (can be immediate or a future date)
  • A statement that the LLC has paid all franchise taxes and completed its winding-up process
• Pay the $220 filing fee. You must also show proof that all Delaware Franchise Taxes have been paid.
• Submit the form:
  • Online: This is the fastest method and doesn’t require a cover letter.
  • Email: If filing by email, include a cover letter with your contact details and payment method.

Processing typically takes 2–3 weeks, though expedited options are available for an extra fee.

Step 5: Handle Post-Cancellation Responsibilities

Even after your LLC is canceled in Delaware, a few final tasks remain.

These include:

• Close your EIN with the IRS Send a letter to the IRS requesting they close your business’s EIN (Employer Identification Number). Include the business name, EIN, and a copy of the Certificate of Cancellation.
• File final federal tax returns Depending on your LLC’s tax structure (sole proprietorship, partnership, or corporation), you’ll need to file the appropriate final tax forms.
• Maintain records Keep copies of all dissolution documents, tax filings, and final bank statements. It’s wise to hold onto these for at least seven years, just in case of an audit or legal claim.

Important Reminders for Dissolving Your LLC in Delaware

• You must pay all franchise taxes before your LLC can be canceled. Unpaid taxes will block your Certificate of Cancellation.
• Winding up must happen before cancellation. You can’t file the final paperwork until all other business affairs are settled.

Reviewing the Phases of LLC Cancellation

Ready to Move On With Confidence?

Dissolving a Delaware LLC may seem complex, but it’s completely manageable when done step by step. By following the correct process—getting approval, winding down operations, and filing the right forms—you protect yourself from future liability and clear the way for what’s next.

If you’re ready to close this chapter, Starcycle is here to help. Our expert team can guide you through every step, from drafting internal documents to making sure nothing slips through the cracks.