Thinking of closing your Kentucky LLC? Whether you’ve completed your business journey or need to shut things down for another reason, it’s essential to formally dissolve your LLC with the state of Kentucky.
Many business owners overlook the formal steps required to legally dissolve their company — and that can lead to expensive tax consequences, penalties, and potential lawsuits down the road.
In this comprehensive 2025 guide, we’ll walk you through how to dissolve an LLC in Kentucky step by step. You’ll learn about required documentation, timelines, tax filings, notifications, and tips for closing your LLC cleanly and legally.
Why Properly Dissolving a Kentucky LLC Matters
Before we dive into the “how,” let’s understand the “why.”
When you form an LLC in Kentucky, it exists as a legal business entity with certain obligations to the state and federal governments. If you decide to stop operating but fail to officially dissolve the company, you may still be responsible for:
Annual report filings
Kentucky state taxes
Franchise fees or Limited Liability Entity Tax (LLET)
Business licenses and renewal fees
Maintaining a registered agent
Legal liabilities
Properly dissolving your LLC helps you:
- Protect your personal assets from future claims
- Avoid late fees and penalties
- Prevent future tax bills or audits
- Eliminate state compliance obligations
Bottom line: Don’t just walk away from your LLC—close it the right way.
Step-by-Step: How to Dissolve an LLC in Kentucky
Step 1: Vote to Dissolve the LLC
If your LLC has multiple members, you must first agree to dissolve the company:
- Review your Operating Agreement to determine the dissolution procedure.
- Most agreements require a majority vote of members.
- Record the vote in official meeting minutes or a written resolution.
No operating agreement? Kentucky’s default law (KRS Chapter 275) requires a majority of members to agree.
📌 Pro Tip: Keep written proof of the vote in case you need to demonstrate it later for legal or tax reasons.
Step 2: File Articles of Dissolution with the Kentucky Secretary of State
This is the legal step that officially ends your LLC’s existence in Kentucky.
Form to File: Articles of Dissolution (Limited Liability Company)
Filing Fee: $40 (as of 2025)
How to File: Online, by mail, or in person
Mailing Address:
Office of the Secretary of State
P.O. Box 718
Frankfort, KY 40602-0718
Online Filing Portal: https://web.sos.ky.gov
Information Required:
- Legal name of the LLC
- Date of the dissolution vote
- Statement of member agreement (if applicable)
- Signature of an authorized person (usually a manager or member)
📌 Pro Tip: File online for faster processing (1–2 business days).
Step 3: Notify the IRS and Cancel Your EIN
Even though EINs (Employer Identification Numbers) are not “closed,” you must inform the IRS that your business is no longer operating:
- File Final Federal Tax Return – Mark the return as “Final Return” on the appropriate box.
- Send a Letter to the IRS to cancel your EIN (include business name, EIN, and reason for closure).
- (Optional) File IRS Form 966 (Corporate Dissolution), if required.
Mail to:
Internal Revenue Service
Cincinnati, OH 45999
📌 Note: You must still file a final return even if your LLC didn’t earn income.
Step 4: File Final Kentucky State Tax Returns
You’ll need to take care of all final taxes and fees owed to the Kentucky Department of Revenue.
Steps:
- File your final LLET return (Limited Liability Entity Tax)
- Pay any outstanding balances
- Close your sales tax and withholding tax accounts, if applicable
Visit: https://revenue.ky.gov for updated forms and instructions.
📌 Reminder: Kentucky taxes apply even if your LLC didn’t earn revenue in its final year.
Step 5: Notify Creditors and Settle Outstanding Debts
Kentucky law doesn’t require you to notify creditors, but it’s strongly recommended to:
- Notify all known creditors in writing
- Pay off debts and obligations
- Cancel business bank accounts
- Notify service providers, vendors, and clients
- Cancel licenses and permits
📌 Tip: Document all debt settlements and keep receipts.
Step 6: Distribute Remaining Assets to Members
After paying off debts, you can divide and distribute any remaining assets.
Distributions should be made according to:
- The Operating Agreement, or
- Member ownership percentages if no agreement exists
Be sure to:
- Prepare a written distribution report
- Maintain proper tax documentation for the IRS
- Notify members to report distributions on their personal returns
📌 Reminder: LLCs taxed as partnerships must also issue final K-1s.
Optional: Withdraw Foreign Registrations
If your LLC was registered in other states as a foreign LLC, you must file a Certificate of Withdrawal in each of those states.
Why? To prevent:
- Additional taxes
- Annual report requirements
- Compliance fees
Check with each Secretary of State website for the correct withdrawal process.
How Long Does It Take to Dissolve a Kentucky LLC?
| Filing Method | Estimated Time |
|---|---|
| Online Filing | 1–2 business days |
| Mail Filing | 5–10 business days |
| In Person | Same-day (often) |
Once approved, you’ll receive a Certificate of Dissolution confirming that your LLC no longer exists in Kentucky.
Common Mistakes to Avoid When Dissolving an LLC in Kentucky
- Forgetting to file final tax returns
- Ignoring foreign registrations in other states
- Skipping creditor notifications
- Assuming EIN cancellation is automatic
- Distributing assets before settling debts
Avoiding these mistakes ensures a clean, legal exit for your business.
Kentucky LLC Dissolution Checklist
Vote to dissolve per your Operating Agreement
File Articles of Dissolution with Secretary of State
Notify the IRS and cancel EIN
File final Kentucky LLET and sales tax returns
Notify creditors and pay off debts
Distribute remaining assets
Withdraw from other states (if applicable)
$40 (as of 2025), payable to the Kentucky Secretary of State.
Yes, but you may need to form a new LLC or restate the original entity, depending on the timing and circumstances.
No, but if you have complex assets or legal concerns, it’s wise to consult a business attorney.
No, Kentucky does not require tax clearance, but you must still file final tax returns and pay all owed taxes.
Final Thoughts: Dissolving Your Kentucky LLC the Right Way
Dissolving your LLC is more than just stopping operations — it’s a legal and financial process that officially ends your business’s obligations.
By following these steps:
- Filing dissolution paperwork
- Settling taxes and debts
- Closing accounts
- Distributing assets correctly
…you can shut down your LLC properly, legally, and responsibly.
Need help with LLC dissolution? We can guide you through every step — contact our team for personalized support.
