Dissolving a Texas LLC
Properly dissolving your Texas LLC protects you from future tax liabilities, fees, or compliance requirements. Filing a Certificate of Termination with the Secretary of State (SOS) and settling final franchise tax obligations are essential steps to formally wind down your entity.
Relevant Code References
- Texas Business Organizations Code §11.056 (Certificate of Termination Requirements)
- Texas Tax Code §171.255 (Final Franchise Tax Report & Payment)
- By analogy, IRC §6061 requires federal tax returns and payments to be truthful and timely; similarly, Texas demands final filings before dissolution.
Relevant Forms & Filings
- Texas Comptroller Form 05-158 (Final Franchise Tax Report and Payment)
- Texas Comptroller Certificate of Account Status (showing zero balance)
- SOSForm 657 (Certificate of Termination — available via SOSDirect)
Detailed Example
“Bluebonnet Consulting, LLC” decides to dissolve on May 1, 2025. Their steps:
- File a final Form 05-158 for the 2025 period, pay $350 in franchise tax plus $15 in penalties (per Tax Code §171.255).
- Obtain a Certificate of Account Status from the Comptroller’s office.
- File SOSForm 657 online with SOSDirect, pay $40 filing fee.
- Receive confirmation of termination on May 4, 2025.
Step-by-Step Guide to Dissolution
- Member Resolution
- Hold a meeting (or unanimous written consent) authorizing LLC dissolution.
- Final Franchise Tax Report
- File “No Tax Due” or full Form 05-158 through WebFile, indicating final report checkbox.
- Pay any tax, interest, and penalties due.
- Request Certificate of Account Status
- Submit Form 05-230 (Request for Account Status) to the Comptroller; fee waived for dissolution.
- File Certificate of Termination
- Log in to SOSDirect, complete Form 657, attach the Certificate of Account Status, and pay the $40 fee.
- Notify Creditors & Close Accounts
- Publish notice if required and settle remaining debts.
- Close bank accounts and cancel EIN with the IRS (via letter to IRS).
Conclusion
Dissolving your Texas LLC requires coordinated filings with both the Comptroller and the Secretary of State. By submitting your final franchise tax report, obtaining a zero-balance certificate, and filing the Certificate of Termination, you officially end your LLC and avoid future liabilities.
Schedule a Consultation
Ensure a seamless dissolution—schedule a meeting with our CPA, Anshul Goyal:
https://calendly.com/anshulcpa/
Disclaimer
This blog provides general guidance on Texas LLC dissolution and does not constitute legal or accounting advice. Always verify current fees and procedures with the Texas Comptroller and Secretary of State. For personalized assistance, consult Anshul Goyal, CPA EA FCA—a licensed CPA in the United States and Enrolled Agent with IRS practice rights—who specializes in entity wind-down and state tax compliance.
About Our CPA
Anshul Goyal, CPA EA FCA, has over a decade of experience guiding businesses through formation, compliance, and dissolution. He helps clients navigate Texas tax obligations and SOS filings to ensure clean entity closures.
Top 5 FAQs
1. When should I file my final franchise tax report?
File by the original due date (May 15) for the period in which you dissolve.
2. Is the $40 SOS filing fee refundable?
No—ensure all information is accurate before submission.
3. Do I need to publish a notice of dissolution?
Not required in Texas, but advisable to inform key stakeholders.
4. Can I reinstate after termination?
No—termination is final. You must form a new entity if needed.
5. What happens to my EIN?
Notify the IRS in writing to close the LLC’s EIN account.