Dissolving a Mistake LLC

Let’s say you formed an LLC, because all of your business friends did, but then it turns out it is really not the right form of business entity for you and your fellow founders.  You haven’t started doing business with the LLC, the LLC has no assets, no members, and you just want to make it go away and form a shiny new corporation with the same name.  What to do?  First of all, there is no shame in making a mistake.  Better to fix it early than be sorry later.  No mistakes, no learning experience.  But I digress.

Since you want the new corporation to have the name you used for your LLC, you must dissolve the LLC before you can go ahead and form a corporation with the same name. Otherwise, the name will not be available. Ideally, you want the process to be simultaneous, so that no other person can snap up your business name in between dissolving the LLC and forming the new corporation.

In order to do that, you have to do a “1-2 Filing” with the Department of State, Division of Corporations.  The filing would contain (in that order):

1. A cover letter explaining that the purpose of the filing is a “1-2 Filing” (that is DOS lingo, I didn’t make this up), i.e. dissolving an LLC by filing the articles of dissolution and at the same time forming a corporation by filing the certificate of incorporation.

2. A check for $60.  This is the fee for filing the articles of dissolution for the LLC.

3. The articles of dissolution for the LLCYou can download a form from the DOS, division of corporation website, it is form DOS 1366.  For the law, look in Section 701 through 705 of the New York Limited Liability Company Law.

4. A check for $135.  This is the fee for filing the certificate of incorporation for your new corporation, including $10 organization tax assuming you chose 200 shares of no par value.

5. The certificate of incorporation for your new corporation.  The form is DOS 1239.

Warning:  This is only an acceptable way of proceeding if your LLC is really an empty, lifeless shell. If you’ve already done business with your LLC, have entered into agreements in the name of the LLC, accepted members and contributed money or property to the LLC, you can’t willy-nilly dissolve the entity.  Talk to your attorney and your accountant.