How to Dissolve an LLC in Texas: Complete 2026 Guide

How to Form an LLC: Step-by-Step

1. 1

   Vote to Dissolve

   Before you can dissolve your Texas LLC, you must follow the voting procedures outlined in your operating agreement. If your operating agreement doesn't specify dissolution procedures, Texas law requires approval from members who own more than 50% of the LLC's membership interests. Document this decision in writing with the date, voting results, and signatures of all members who voted to dissolve.

   Pro tip: Even if you're a single-member LLC, create a written resolution documenting your decision to dissolve. This protects you legally and provides clear documentation for tax purposes.
2. 2

   File Certificate of Termination with the Texas Secretary of State

   After obtaining tax clearance (see step 4), file the Certificate of Termination with the Texas Secretary of State. The filing fee is $40 and can be submitted online at https://www.sos.state.tx.us or by mail. Processing time varies depending on your submission method. The certificate must include your LLC's name, file number, and a statement that all debts and liabilities have been paid or adequately provided for.

   Pro tip: Don't file the Certificate of Termination until you've completed winding up your business affairs and obtained tax clearance. Texas requires you to settle debts first, then file for termination.
3. 3

   Notify Creditors and Settle Debts

   Texas law requires you to notify known creditors of your LLC's dissolution and settle all outstanding debts before filing the Certificate of Termination. The creditor notice period varies by state statute, but you must provide reasonable notice to allow creditors to submit claims. Pay all debts, loans, and obligations in full. If you cannot pay all debts, you may need to negotiate payment plans or settlements.

   Pro tip: Keep detailed records of all creditor notifications and debt payments. You'll need to certify in your Certificate of Termination that all debts have been paid or adequately provided for.
4. 4

   Obtain Tax Clearance from the Texas Comptroller

   CRITICAL: Texas REQUIRES tax clearance from the Comptroller before dissolution is finalized. File your final Texas franchise tax return and pay any outstanding franchise taxes. Contact the Texas Comptroller's office to obtain a tax clearance certificate confirming all state taxes are current. Without this clearance, the Secretary of State cannot process your Certificate of Termination.

   Pro tip: Start the tax clearance process early. The Comptroller may need time to review your account and issue clearance, which could delay your dissolution if outstanding issues are discovered.
5. 5

   Cancel Your EIN with the IRS

   Close your LLC's tax accounts with the IRS by sending a letter to the IRS Cincinnati office stating your intent to cancel your EIN. Include your LLC's legal name, EIN, business address, and the reason for closing (dissolution). Also file your final federal tax return (Form 1065 for multi-member LLCs or Schedule C for single-member LLCs) and mark it as 'FINAL RETURN.'

   Pro tip: Keep a copy of your EIN cancellation letter and certified mail receipt. The IRS doesn't send confirmation of EIN cancellations, so your records are your only proof.
6. 6

   Distribute Remaining Assets to Members

   After paying all debts and obligations, distribute any remaining LLC assets to members according to their ownership percentages as outlined in your operating agreement. If no agreement exists, distribute assets according to each member's capital contributions. Document all asset distributions in writing and have all members sign acknowledgment of receipt.

   Pro tip: Consider the tax implications of asset distributions. Some distributions may be taxable events for members, so consult with a tax professional before finalizing distributions.
7. 7

   Confirm Dissolution is Complete

   Once the Texas Secretary of State processes your Certificate of Termination, your LLC is officially dissolved. You should receive confirmation from the Secretary of State. Keep copies of all dissolution documents, final tax returns, and asset distribution records for at least seven years. Your LLC's legal existence ends on the date the Certificate of Termination is filed.

   Pro tip: Even after dissolution, you may need to maintain some records for legal and tax purposes. Store all dissolution documents in a safe place with your other important business records.

Winding-Up Checklist

• Cancel all Texas business licenses and permits

  Contact the issuing agencies for each license and permit your LLC holds to formally cancel them. This prevents ongoing fees and compliance obligations.

• Close business bank accounts

  After paying all debts and distributing assets, close all business bank accounts and credit lines. Obtain written confirmation of account closures for your records.

• Cancel business insurance policies

  Terminate all business insurance policies including general liability, property, and professional liability coverage. You may be eligible for partial premium refunds.

• Notify vendors, suppliers, and customers in writing

  Send formal written notice to all business relationships about your LLC's dissolution. Include the effective date and instructions for final transactions or account settlements.

• File final payroll tax returns and W-2s (if you had employees)

  Complete all final payroll tax filings with federal, state, and local authorities. Issue final paychecks, W-2s, and cancel workers' compensation coverage.

• Retain business records per Texas retention requirements

  Keep all business records including tax returns, financial statements, and legal documents for at least seven years after dissolution as required by law.