How to Dissolve an LLC in Massachusetts: Fees and Steps

How to dissolve an LLC in Massachusetts, step by step

Massachusetts LLC law has a single closing document. A certificate of cancellation is filed with the state secretary once the LLC has dissolved and finished winding up, or at any time it has no members (M.G.L. c. 156C, s. 14). The certificate gives the LLC's name, the date its certificate of organization was filed, the reason for cancelling and, if wanted, a later effective date.

The member vote, wind-up and federal returns follow the pattern in how to dissolve an LLC. The Massachusetts order:

Filing the Massachusetts Certificate of Cancellation

The Secretary of the Commonwealth's LLC regulation sets the fee: the fee for filing a certificate of cancellation shall be $100.00. It also adds the condition that trips up many owners: to file a certificate of cancellation, the LLC must file all annual reports and pay all fees required by law (950 CMR 112.00). The regulation also asks for the LLC's federal employer identification number on the certificate.

That condition matters because Massachusetts annual reports are expensive. Each LLC annual report carries a $500 fee (950 CMR 112.00). An LLC that went quiet for three years has $1,500 of reports to file before the $100 cancellation will be accepted. Bring the record current first, then cancel.

The Department of Revenue's closing guide lists the Corporations Division's number for questions: 617-727-9640 (Massachusetts DOR).

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: 950 CMR 112.00: Limited liability companies (Secretary of the Commonwealth regulation)

Massachusetts DOR and DUA: closing the accounts

The Massachusetts Department of Revenue's closing guide covers its own accounts and points to the other agencies (Massachusetts DOR).

• Cancel registrations: businesses closing as a whole, or closing specific DOR tax registrations, must either cancel with MassTaxConnect or fill out and submit a Form AI-1. With a retroactive closing date, still file returns through the period when you actually closed the account.
• Final income returns: a multi-member LLC taxed as a partnership files a final Form 3, Partnership Return of Income, with a copy of the federal Form 1065 and Schedule K-1. A corporation, or an LLC taxed as one, files a final corporate excise return with the final return oval selected.
• Department of Unemployment Assistance: sign on to the QUEST self-service system, choose Account Maintenance, then Suspend Employer Account, and complete the requested information.
• IRS: file the final return for the year you close, final payroll forms if you had employees, and a letter to close the EIN account (IRS).

Dissolving a Massachusetts corporation

A Massachusetts business corporation dissolves by delivering articles of dissolution to the secretary of state at any time after dissolution is authorized, and it is dissolved on the effective date of those articles (M.G.L. c. 156D, s. 14.03). The state rate table lists Articles of Dissolution among the Corporations Division filings, at $100 (801 CMR 4.02).

A Department of Revenue certificate is not a precondition. The Department's own guidance says certificates of good standing for dissolution purposes are no longer required for the Secretary of State to dissolve a corporation (Massachusetts DOR). The notice requirement survives, though: DOR says the requirement to notify its commissioner of a corporation's formal dissolution is still in effect, met by a letter on corporate letterhead, signed by an officer, stating the intent to dissolve, with a copy of the vote attached and mailed to DOR, Attn: Corporate Dissolutions (Massachusetts DOR). The corporation also files a final excise return, and Form 966 with the IRS after adopting the plan. For the federal side, see how to dissolve a corporation.

Administrative dissolution in Massachusetts and why it is not a shortcut

The state secretary may start administrative dissolution of an LLC that has failed for 2 consecutive years to file annual reports, or that has become inactive. After written notice, the LLC has 90 days to cure; otherwise it is dissolved. An administratively dissolved LLC continues in existence but may only wind up and liquidate (M.G.L. c. 156C, s. 70).

For corporations the trigger is broader: 2 or more consecutive years of missed reports, unfiled tax returns or unpaid taxes under chapters 62C or 63 (M.G.L. c. 156D, s. 14.20). Reinstating a corporation requires a certificate from the Department of Revenue that all corporate excise taxes and penalties are paid (M.G.L. c. 156D, s. 14.22). Letting a Massachusetts company drift does not end its tax registrations, so the voluntary route is cleaner.

Withdrawing an out-of-state LLC from Massachusetts

An LLC formed elsewhere and registered in Massachusetts files a Certificate of Withdrawal (Massachusetts DOR). Under the regulation, a foreign LLC's certificate of cancellation must state that all taxes and fees owed the Commonwealth have been paid or provided for, and either filing requires that all annual reports were filed and fees paid (950 CMR 112.00). The foreign LLC annual report is also $500, so check for gaps first.

Records to keep when a Massachusetts LLC closes

Keep the filed certificate, the MassTaxConnect cancellation confirmations and the DUA suspension notice. The IRS asks for employment tax records to be kept at least 4 years after the tax is due or paid (IRS).

Export accounting, payroll, CRM, ticketing and shared drives before cancelling them: exporting company records before closing and business records after closing explain what to keep, for how long and who holds it.

What a Massachusetts company's archive may be worth

A Massachusetts company's archive is often richer than its owners expect: years of code reviews, lab and project notes, client work product and support threads. AI developers license operating records like these when they are de-identified and the company holds the rights. Winding up is when assets get sold, so check before the files are deleted: selling company data after closing.

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.