Texas Dissolution Package to Dissolve Limited Liability Company LLC
TEXAS
LIMITED LIABILITY COMPANY DISSOLUTION
STATUTORY REFERENCE:
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Texas Statutes: Business Organization Code; Title 1, Chapter 11
& Title 3, Chapter 101, Subchapter L
DISCUSSION
A Texas limited liability company (LLC) is dissolved and it must wind
up its business affairs upon the happening of the first to occur of the
following:
-
the period fixed for the duration of the LLC expires;
-
the occurrence of events specified in the articles of organization or in
the regulations to cause dissolution;
-
the action of the members to dissolve the LLC;
-
if no capital has been paid into the LLC, the act of a majority of the
managers or members named in the articles of organization to dissolve the
limited liability company;
-
except as otherwise provided upon the death, expulsion, withdrawal pursuant
to or as provided in the articles of organization or regulations, bankruptcy,
or dissolution of a member or the occurrence of any other event which terminates
the continued membership of a member in the LLC; or
-
entry of a decree of judicial dissolution under Section 6.02 of this Act.
A LLC is not upon the happening of an event of dissolution if there is
at least one remaining member, and the business of the LLC is continued
by the vote of that/those members as stated in the articles of organization
or regulations of the LLC, or if not so stated, by all remaining members.
Unless otherwise provided in the articles of organization or in the
regulations, an election to continue the business of the LLC must be made
within 90 days after the date of the occurrence of the event of dissolution.
If an election to continue the business of the LLC is so made, the election
is not effective unless an appropriate amendment extending the period
fixed for the duration of the LLC or deleting the event specified in the
articles of organization that caused the dissolution is made by the LLC
to its articles of organization during the three-year period following
the date of the event of dissolution.
When the LLC is dissolved, the affairs of the business must be wound
up as soon as reasonably practicable. The winding up is accomplished by
the managers or members or by any other person or persons designated by
the articles of organization, by the regulations, or by resolution of the
managers or members. (A court of competent jurisdiction, on cause shown,
may wind up the LLC's affairs on application of any member or the member's
legal representative or assignee and may appoint a person to carry out
the liquidation and may make all other orders, directions, and inquiries
that the circumstances require.)
When the LLC is dissolved, and BEFORE it files Articles of Dissolution,
the LLC
must cease to carry on its business except as may be necessary for the
winding up process.
must send a written notice by registered or certified mail of the intent
of the LLC to dissolve to each known creditor of and claimant against the
LLC.
must collect its assets, convey and dispose of such of its properties as
are not to be distributed in kind to its members, pay, satisfy or discharge
its liabilities and obligations, (or make adequate provisions for payment
and discharge of those liabilities and obligations), and
must do all other acts required to liquidate its business and affairs.
 In the event that the assets of the LLC are not sufficient to satisfy
or discharge all the LLC's liabilities and obligations, the LLC must apply
those assets so far as they will go to the just and equitable payment of
the liabilities and obligations.
After paying or discharging all of its obligations, or making adequate
provisions for payment and discharge of those obligations, the LLC must
then distribute the remainder of its assets, either in cash or in kind,
among its members according to their respective rights and interest.
On the winding up of a LLC, the assets must be paid or transferred
as follows:
to the extent otherwise permitted by law, to creditors, including members
who are creditors in satisfaction of liabilities (other than for distributions)
of the LLC, whether by payment or by establishment of reserves;
unless otherwise provided by the articles of organization or regulations,
to members and former members in satisfaction of the company's liability
for distributions; and
unless otherwise provided by the articles of organization or regulations,
to members its members according to their respective rights and interest.
When all liabilities and obligations of the LLC have been paid or discharged
(or adequate provision has been made for those liabilities and obligations)
and all of the remaining property and assets of the LLC have been distributed
to its members according to their respective rights and interest, articles
of dissolution are filed by a manager or authorized member, or in the case
of a dissolution by action of the organizer of the LLC, by the organizer.
In the event the LLC property and assets are not sufficient to satisfy
and discharge all the LLC's liabilities and obligations and all the property
and assets have been applied so far as they will go to the just and equitable
payment of the LLC's liabilities and obligations, articles of dissolution
are filed at that time.
If the LLC has elected to dissolve by action of its members, a copy
of the resolution to dissolve, together with a statement that the resolution
was adopted in accordance with Section D, Article 2.23, of this the Limited
Liability Company Act.
When the articles of dissolution filed, there must be filed with them
a certificate (#05-305 or #05-329) from the Comptroller of Public Accounts
that all franchise taxes have been paid and that the company is in good
standing for the purpose of dissolution.
A tax year ends on December 31st. The company must be in good standing
through the date of receipt of the articles of dissolution by the secretary
of state. A post mark date will not be considered as the date of receipt.
The Secretary of State suggests that companies attempting to dissolve
prior to the end of the franchise tax year, make their submissions well
in advance of the tax deadline.
Limited liability companies not dissolved on or before December 31st
will be subject to the new franchise tax year's requirements as of January
1st.
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