How to Dissolve an LLC in Kentucky: Form LLD, Fees, Taxes

How to dissolve an LLC in Kentucky, step by step

Kentucky is explicit that closing is not optional: business entities are required by law to formally dissolve. A domestic entity files articles of dissolution, and a foreign entity files a certificate of withdrawal (Kentucky Secretary of State). The office also recommends checking in with the IRS, the Kentucky Department of Revenue, the unemployment insurance office, the county clerk and any licensing agency.

For the parts of a wind-down that are the same everywhere, see how to dissolve an LLC. A Kentucky LLC usually runs through these steps:

Filing Kentucky Articles of Dissolution (form LLD)

The Secretary of State's forms library lists Articles of Dissolution (LLD) for limited liability companies (Kentucky forms library), and the Kentucky One Stop portal points to the governing statute: an LLC must file Articles of Dissolution and comply with KRS 275.285 (Kentucky One Stop). You may also draft your own dissolution document, as long as it meets the requirements in the Kentucky Revised Statutes (Kentucky Secretary of State).

The fee schedule lists Articles of Dissolution for a domestic LLC at $40 (Kentucky Secretary of State fees). Fees can be paid by cash, check payable to the Kentucky State Treasurer, a prepaid account, or card. To file online, the Secretary of State's FastTrack index includes File Dissolution / Cancellation (Kentucky FastTrack).

After the filing is recorded, the company's search entry should read "inactive status and good standing", which is how Kentucky shows an entity that filed articles of dissolution, as opposed to one in bad standing (Kentucky Secretary of State).

This guide is general information, not legal or tax advice. Fees and forms change: confirm them with the agency before you file, and ask an attorney or accountant about your situation.

Source: Kentucky Secretary of State: Fees

Kentucky taxes: the final LLET return and closing Revenue accounts

Kentucky taxes LLCs in their own right. The limited liability entity tax applies to every business protected from liability by state law, including LLCs and corporations, and a company with $3 million or less in gross receipts or gross profits still pays a $175 minimum (Kentucky Department of Revenue). That is the reason not to leave a Kentucky LLC half-closed.

• Final returns: a Kentucky corporation or LLC that is no longer operating must file a "final" corporate or limited liability entity tax return so those tax accounts can be closed (Kentucky One Stop).
• Other accounts, such as withholding and sales and use tax, are cancelled on form 10A104, Update or Cancellation of Kentucky Tax Account(s), or through MyTaxes.
• Sales tax: a business that files sales and use tax returns must return its sales tax permit to the Department of Revenue.
• Unemployment insurance: through the Unemployment Insurance Self-Service site, an employer can request inactivation of its employer reserve account (Kentucky Career Center). File the last quarterly report first.
• Federal: file the final return for the year of closing and close the EIN account by letter afterwards (IRS).

Dissolving a Kentucky corporation

A Kentucky profit corporation files Articles of Dissolution under KRS 271B.14-030. The forms library has two versions: form IPD for dissolution by incorporators or initial directors, and form DIS for dissolution by the board of directors or shareholders (Kentucky forms library). The domestic corporation fee is $40, the same as for an LLC (Kentucky Secretary of State fees).

The corporation also files its final corporate income and LLET return, and Form 966 with the IRS after adopting a plan of dissolution. More on the corporate side: how to dissolve a corporation.

Administrative dissolution and reinstatement in Kentucky

Every Kentucky entity files an annual report between January 1 and June 30. Domestic entities that miss the June 30 deadline are administratively dissolved, meaning they are inactive and in bad standing until they reinstate (Kentucky Secretary of State).

Reinstatement is slower than in most states because two other agencies sign off. The Secretary of State requests a letter of good standing from the Kentucky Department of Revenue and, for profit companies, from the Division of Unemployment Insurance, and processes the application only when both letters arrive (Kentucky Secretary of State). The fee schedule adds a $100 reinstatement penalty on top of delinquent fees (Kentucky Secretary of State fees). If the LLC may ever need to sue, collect a refund or sign a sale, filing form LLD while it is still in good standing is far simpler.

Withdrawing an out-of-state LLC from Kentucky

A foreign LLC or corporation authorized in Kentucky files a Certificate of Withdrawal, form WFE (Kentucky forms library). The fee schedule lists the Application for Certificate of Withdrawal at $40 (Kentucky Secretary of State fees). Close the Kentucky LLET and payroll accounts as well, because withdrawing the registration does not cancel tax accounts.

Records to keep when a Kentucky company closes

File the Secretary of State's stamped Articles of Dissolution, the final LLET return and the 10A104 confirmation with the company records. The IRS expects employment tax records to be kept for at least 4 years after the tax becomes due or is paid (IRS).

Export the company's accounting, payroll and customer systems to files you control before you cancel the subscriptions. See exporting records before closing and what to keep after closing.

A Kentucky wind-down and the company's data

Winding up means turning assets into cash for creditors and members. For many service, software and trade businesses, the largest unsold asset is the record of how the work was done: years of tickets, job notes, quotes and correspondence. AI developers license that kind of material when it is de-identified and the company holds the rights. Selling company data after closing covers the checks before anything leaves the company.

Closing the company? Before you cancel software or delete files, find out whether its records are worth licensing: years of tickets, work orders, email and code can be. Get a free estimate of what your records could be worth.