How to Dissolve an LLC in Massachusetts: The Certificate of Cancellation

What the Massachusetts Certificate of Cancellation asks for

950 CMR 112.19(1) says a certificate of cancellation “shall be filed with the Division and shall set forth” a list of items. We counted six items in that list, lettered (a) through (f).

None of the six items is an address. The regulation asks for the EIN, the name, a date, and a reason. Where state mail about your LLC goes depends on the addresses already on the LLC’s record. We cover that in the section on final notices below.

The effective date follows 950 CMR 112.10. It says documents “are effective on the date approved by the Division,” unless Chapter 156C allows a later date and the document gives one. That later date “shall be a date certain,” which means an exact calendar date.

How much it costs to dissolve an LLC in Massachusetts

The state fee to cancel a domestic LLC is $100. 950 CMR 112.19(2) says “The fee for filing a certificate of cancellation shall be $100.00.” The fee table in 950 CMR 112.29 lists the same amount for a “Certificate of Cancellation.”

The total can be higher if annual reports are missing. 950 CMR 112.19(3) says “In order to file a certificate of cancellation, the limited liability company shall file all annual reports and pay all fees required by law to be filed and paid.” Under 950 CMR 112.14, each annual report “shall be accompanied by a fee of $500.00.”

950 CMR 112.29(2) lists how you can pay. In person, you can pay with cash, a personal or cashier’s check, or a money order. By mail, you can pay with a personal or cashier’s check or a money order. For electronic or fax filings, it lists “MasterCard, Visa, electronic funds transfer or debit card.” Checks and money orders “must be payable to the Commonwealth of Massachusetts.”

How to file the Certificate of Cancellation

950 CMR 112.09 lists four ways to deliver a document to the Division. They are personal or courier delivery, postal mail, fax “in a manner authorized by the Division on its website,” and “electronic transmission in the manner authorized by the Division on its website.” 950 CMR 112.04 says online services “include filing documents.” The same section says email “cannot be used to file limited liability company documents.”

You do not have to use the state’s form. 950 CMR 112.07 says “The use of official forms is optional.” A document that is not on an official form must be on 8 1/2 by 11 inch paper, follow the format rules in 950 CMR 112.00, and use a minimum font size of ten. The regulation says a document that does not meet these rules “will be rejected.”

Before you file, check the Corporations Division’s current form, mailing address, and online filing options. The regulation lists the required items, but the form may ask for more.

Closing the LLC with the IRS

The state filing does not close your federal tax account. The IRS page on closing a business says “You must file a final return for the year you close your business.” Which return depends on how the LLC is taxed. The IRS says an LLC “may be classified for federal income tax purposes as a partnership, a corporation or an entity disregarded as separate from its owner.”

For a single-member LLC owned by one person, the IRS says the LLC’s activities “should be reflected on its owner’s federal tax return,” generally on Schedule C, E, or F. For a partnership return, the IRS says to check the “final return” box on Form 1065. The same page says “Remember to check your state responsibilities when closing a business.”

The last IRS step is the EIN. The IRS says “we can’t cancel it, but we can deactivate it.” You send a letter with the EIN, the legal name, the address, and your reason. If you have the EIN assignment notice the IRS sent you, both IRS pages say to include a copy. Two IRS pages give different mailing addresses for that letter. The closing a business page lists Cincinnati, OH 45999. The EIN page lists Kansas City, MO 64108 or Ogden, UT 84201. Check the IRS’s current page before you mail it. The IRS says it cannot close the account until you have “filed all necessary returns and paid all taxes owed.” Our guide to dissolving an LLC and closing the EIN covers the order across states.

State taxes are a separate account with the Massachusetts Department of Revenue. This guide does not cover the Department of Revenue’s steps. Contact the Department of Revenue about closing your LLC’s state tax account.

Where final notices go after you close

The state and the IRS each send mail to the address they already have on file.

On the state side, the LLC’s certificate of organization lists “the street address of the office in the Commonwealth at which its records will be maintained,” under 950 CMR 112.11(1)(c). The certificate also lists the resident agent’s name and street address. 950 CMR 112.20(3) says a notice of administrative dissolution “shall be sent by mail postage prepaid to the office required to be maintained by M.G.L. c. 156C, § 5(1).” Keep that records office address current until the cancellation is filed.

On the federal side, 26 CFR 301.6212-2(a) says your last known address “is the address that appears on the taxpayer’s most recently filed and properly processed Federal tax return,” unless the IRS gets “clear and concise notification of a different address.” Paragraph (b)(1) says an address you give “another government agency” does not count as that notice. If the business mailing address changed, the IRS says to use Form 8822-B. Our Form 8822-B guide explains how to file it.

Put the address where you will still read mail on the final tax return. That address is the one the IRS uses for letters about that return unless you notify it of a new one.

Should you dissolve your LLC or leave it inactive?

An LLC that stops doing business still owes its annual report each year. 950 CMR 112.14 says each LLC “shall file an annual report with the Division on or before the anniversary date of the filing of its original certificate of organization.” Each report has a $500 fee.

If reports stop, the state can act. 950 CMR 112.20(1) says the Division may start a proceeding to dissolve an LLC that “has failed for two consecutive years to comply with the provisions of law requiring the filing of annual reports.” The same paragraph also lets the Division act if the Director is satisfied that the LLC “has become inactive and its dissolution would be in the public interest.” An LLC the state dissolves this way is recorded differently from one the members cancel. Our guide to a Massachusetts LLC that was involuntarily dissolved explains how that looks on the state record and how reinstatement works.

Cancelling also has a condition. Under 950 CMR 112.19(3), you must file all annual reports and pay all fees before the Certificate of Cancellation can be filed. Waiting does not remove the annual reports that are already due.