How to Dissolve a Delaware LLC from Abroad: A Step-by-Step Guide

Now, a disclaimer first. If you don’t know how or don’t have time to deal with this, your best bet is to work with an experienced registered agent for guidance to make sure you’re doing it correctly. But if you’re willing enough to do it on your own or you want to learn more about it, then let’s start with our article.

What Does “Dissolve” Mean?

Before you start the process, it’s important to understand what dissolving a Delaware LLC involves. In simple terms, dissolution is the official decision to end your company’s existence as a legal entity. Once that decision is made, you’ll go through a process called winding up, which means settling debts, closing accounts, and distributing any remaining assets. 

The final step is filing the Certificate of Cancellation with the State of Delaware, which formally removes your LLC from the state’s records.

If you’ve gone through the effort of forming a US LLC for non-residents, dissolving it properly is just as important. Closing your LLC the right way ensures you won’t be responsible for future taxes, penalties, or compliance issues after the business is shut down.

In short, dissolving your Delaware LLC means:

• Making the decision: following your operating agreement’s rules for member approval.
• Winding up the business: paying off debts, notifying partners, and wrapping up contracts.
• Filing the cancellation: submitting the necessary paperwork and fees to the Delaware Division of Corporations.

Handled correctly, the process is straightforward and helps you move on without lingering legal or financial problems.

What You’ll Need

Before you start the dissolution process, it’s best to gather all the required documents and information in one place. This will make the process smoother and help you avoid delays or rejection from the state.

While Delaware is often considered the best state to form an LLC because of its business-friendly laws, closing an LLC here still requires meeting specific state requirements. Having these items ready will ensure you can complete each step without backtracking.

Take a look at this checklist:

1. Operating Agreement & Member Resolution

• Your LLC’s operating agreement will explain how to approve a dissolution.
• You’ll also need a written resolution from the members confirming the decision and naming who is authorized to sign and file paperwork.

2. LLC Formation Details

• Exact legal name of the LLC.
• Delaware state file number.
• Date of formation.

3. Registered Agent Contact

• Your Delaware registered agent will often file the cancellation for you, especially if you are abroad.

4. Franchise Tax Payment Proof

• A receipt or confirmation showing the current year’s Delaware LLC franchise tax has been paid in full.

5. IRS Information

• Employer Identification Number (EIN).
  • Last tax year and the type of return filed.

6. Banking and Payment Processor Details

• Account numbers, closing instructions, and any pending transactions.

7. Foreign Qualification Records (if applicable)

• If your Delaware LLC is registered to operate in other US states, you’ll need withdrawal or termination documents for those states.

Be sure to prepare these documents in advance, so you can speed up the dissolution process and avoid last-minute surprises.

Timeline and Processing Tips

When dissolving your Delaware LLC from overseas, timing matters. The state won’t process your cancellation until all requirements are met, so understanding the Delaware process will help you plan and avoid delays.

Here’s a practical timeline you can follow:

Step-by-Step Sequence

1. Approve Dissolution: Hold your member vote, document it in writing, and name your authorized signer.
2. Wind Up Your Affairs: Pay debts, collect receivables, and notify partners or clients.
3. Pay Franchise Tax: Delaware requires you to pay the current year’s LLC tax before accepting a cancellation.
4. File Certificate of Cancellation: Submit through your registered agent or directly to the Division of Corporations.
5. Receive Confirmation: Keep the file-stamped certificate for your records.
6. Complete IRS Close-Out: File final tax returns and send your EIN closure letter.
7. Close Bank and Payment Accounts: Transfer funds and download transaction history before closing.

Processing Tips for Foreign Owners

• Use Your Registered Agent: This avoids mailing delays and ensures the filing is handled correctly.
• Consider Expedited Service: If you’re on a deadline, Delaware offers same-day or 24-hour processing for an extra fee.
• Prepare for Time Zones: Keep in mind the time difference when communicating with Delaware offices or your agent.
• Don’t Forget Foreign Registrations: If your LLC is also registered in other states, withdraw there as part of your wind-up.
• Store All Records Digitally: Save scanned copies of tax payments, filings, and closing confirmations in one secure location.

If handled with the right steps and preparation, dissolving from abroad can be just as smooth as doing it in person.

What to Budget

Before starting the dissolution process, it’s important to understand the expenses involved so there are no surprises along the way. The cost to dissolve an LLC in Delaware is straightforward, but additional fees may apply depending on your specific situation and service choices.

Typical Costs

• Delaware Filing Fee: The standard fee for filing the Certificate of Cancellation is $220.
• Certified Copy (Optional): If you require a certified copy for banks, investors, or foreign authorities, an additional $50 will be charged.
• Expedited Processing (Optional): Delaware offers faster turnaround options for an extra fee:
  • Same-day processing
  • 24-hour service
• Franchise Tax: You must pay the current year’s $300 LLC franchise tax before the state accepts your cancellation.
• Registered Agent Fees: If your registered agent prepares and files the paperwork for you, expect a service fee (often between $50 and $150).
• Tax Preparation Costs: If you hire an accountant to prepare your final IRS returns, costs vary based on complexity.

Possible Extra Expenses

• Foreign Qualification Withdrawals: If your Delaware LLC is registered in other states, you’ll need to pay filing fees in those states to officially withdraw.
• Courier or Mailing Fees: If you’re abroad and need to send original documents to your agent or the state.

Common Mistakes to Avoid

Even if you’ve followed all the main steps, small errors can slow down the process, or worse, create legal or tax headaches later. Many of these mistakes are easy to avoid if you plan, especially when closing a Delaware LLC for non-residents from abroad.

Not Paying the Current Year’s Franchise Tax

Delaware will reject your cancellation if your $300 LLC franchise tax for the current year hasn’t been paid in full. Even if you close in January, the tax still applies.

Forgetting to Withdraw from Other States

If your Delaware LLC is registered in other US states, you must file a withdrawal or termination in each one. Otherwise, you may continue to receive tax bills or annual report notices.

Missing the “Final Return” Box on IRS Filings

When you file your last tax return, always check the “final return” box. If you don’t, the IRS will assume your LLC is still active and may send follow-up notices.

Not Closing the EIN

Some business owners forget to send the EIN closure letter to the IRS. Without this step, your EIN may remain linked to an “active” account in IRS records.

Closing Accounts Before Downloading Statements

Once a bank or payment processor account is closed, retrieving transaction history can be difficult or impossible. Always download and store statements before shutting them down.

Losing Access to Key Documents

Keep digital copies of your member resolution, proof of tax payment, file-stamped cancellation, and final IRS filings. These can be important for future tax audits or legal questions.

Final Thoughts

Closing your business the right way is just as important as starting it. By following the right steps, figuring out how to dissolve a Delaware LLC from abroad can be a smooth, stress-free process while avoiding penalties, future tax notices, and legal headaches. From approving dissolution to finalizing IRS paperwork, preparation, and attention to detail will save you time and money.

And speaking of LLCs, if you’re once again planning to form a new US entity in the future, don’t forget to check EINwaittime.com for up-to-date EIN processing timelines and helpful guides on US business setup.