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How to Terminate a Texas LLC

For a variety of reasons, members of an LLC may decide that they want to legally terminate the entity. In order to accomplish that, there are five substantial steps that must be undertaken. First, an event requiring winding up must occur. That event may be a compulsory event pursuant to the Texas Business Organizations Code (TBOC), such as expiration of the duration stated in the formation certificate, or a discretionary event like the voluntary decision of the members to dissolve the LLC.

Second, winding up of the LLC’s remaining affairs must be conducted. So all operations must be ceased except for those activities directly related to the winding-up. Those activities may include liquidating assets, paying creditors, paying other outstanding debts, collecting on debts owed to the LLC, or settling outstanding legal claims.

Third, a Certificate of Account Status (CAS) must be requested from the Texas Comptroller. That Certificate allows the Texas Secretary of State to confirm that an LLC is current on all of its tax obligations before the dissolution is effected. Requesting the Certificate requires completion of Form 05-359 which can either be submitted online, triggering a 4-6 week wait to receive the Certificate, or submitted in a Field Office, which can issue the Certificate the same day on site.

After receiving a Certificate of Account Status, the next step is to complete a Certificate of Termination request, which is available on the Secretary of State’s website. The form can be submitted online, by fax, or by mail. After receiving the Certificate of Termination (CoT) attaching the CAS to the CoT and pay the Texas Secretary of State the associated filing fee for dissolving an LLC. Within a few days after receiving both certificates and the filing fee, the Secretary of State will respond confirming termination of the LLC. To address any questions or difficulties with termination of an LLC, contact a qualified attorney for assistance.

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