How to Dissolve a Delaware LLC

How to dissolve a Delaware LLC in 3 steps

In Delaware, the legal term for closing an LLC is “cancellation.” Before your LLC can be officially canceled with the state, you, as the business owner, must first wind up its operations. While you are responsible for handling the winding-up process yourself, you can then either file the necessary cancellation paperwork with the Delaware Division of Corporations yourself or hire an online legal service provider like LegalZoom to help you complete and file the cancellation paperwork with the Delaware Division of Corporations. 

Either way, here’s how to get started.

Step 1: Formally approve the dissolution

First, you should review your LLC’s operating agreement, which typically outlines the specific procedure for dissolution. If you have multiple members, this usually requires holding a formal vote to approve the dissolution. Single-member LLCs may have simpler requirements, but you should still follow whatever process your agreement specifies.

Once you’ve completed the required steps, document the decision in writing—whether that’s meeting minutes from a member vote or a simple written resolution if you’re the sole member and owner.

Delaware’s default dissolution rules

If your LLC doesn’t have an operating agreement (or if your agreement doesn’t specify dissolution procedures), Delaware’s LLC Act provides default rules. Under Section 18-801, an LLC can be dissolved if you have approval from members holding more than two-thirds of the profit interests in the LLC. Members can vote in person or in writing, and the vote should be recorded in the minutes.

Step 2: Wind up your LLC’s affairs

“Winding up” means taking care of all outstanding matters related to your LLC before it can be officially cancelled. According to Delaware law (Section 18-803), this process can involve the following: 

• Settling the company’s business
• Paying off debts and obligations
• Handling any pending lawsuits or legal claims
• Distributing remaining assets to members

Essentially, you’ll clean up any loose ends so your LLC can close without leaving behind unresolved issues. Here’s where to start. 

Pay taxes

You must pay all taxes owed to the state (including Delaware’s annual franchise tax) before you can officially dissolve your LLC. You also need to wrap up state taxes by filing the final withholding return and income tax return, indicating that the company is out of business on both forms.

If needed, you can contact the Delaware Franchise Tax Section at (302) 739-3073 to determine which state taxes you owe. 

While you aren’t required to resolve federal taxes prior to filing your LLC cancellation in Delaware, you’ll still need to take care of them at some point. The IRS requires a final tax return—usually Form 1065 or Form 1120, depending on how your LLC is classified for tax purposes. It’s also a good idea to address any other outstanding tax obligations (such as payroll taxes) to avoid future complications. 

Settle outstanding debts and distribute assets

Next, you’ll need to settle outstanding debts before you can distribute assets to members. The typical order of priority for distributing assets is as follows (Section 18-804), though your operating agreement may specify other provisions.

1. To creditors. This includes lenders, vendors, and even members or managers who are owed money as creditors. 
2. To members and former members. If the operating agreement calls for specific payments to LLC members (such as previously agreed distributions), those are paid next.
3. To members for return of contributions. Each member gets back the money they originally invested in the LLC.
4. To members based on ownership share. Any remaining assets are divided among members based on their ownership percentages or as outlined in the operating agreement.

In addition, your LLC should make reasonable arrangements to address any claims or lawsuits that may arise against the company in the future. If there aren’t enough assets to cover all claims, payments are generally made according to legal priority. 

If you run into any questions throughout the dissolution process, you might reach out to a business attorney through LegalZoom’s network, which comes with unlimited 30-minute consultations on any new topic. 

Close accounts, cancel licenses, and notify your registered agent

Once you’ve settled your LLC’s major legal and financial obligations, you can wrap up the remaining administrative matters. First, contact your bank to close all business banking and credit accounts, but make sure all final transactions have cleared beforehand. 

Then, review any business licenses or permits your LLC holds. While some may expire automatically, you should verify whether you need to cancel or notify the issuing agency. Finally, inform your registered agent that you’re dissolving the LLC and handle any final correspondence as needed. 

Step 3: File the Certificate of Cancellation

After winding up your LLC, you’re ready to file the Delaware Certificate of Cancellation with the Division of Corporations. 

You’ll need to submit the cancellation form along with a cover letter that includes your contact information (name, address, and phone/fax number). The filing fee for a domestic LLC is $220, and you can make checks payable to "Delaware Secretary of State.” Processing time varies based on the volume of filings submitted to the Delaware Secretary of State, but expedited service is available for faster processing times.

Don’t forget that if your Delaware LLC is registered to do business in other states, you’ll need to follow each of those states’ separate cancellation or dissolution procedures as well. 

Dissolve your Delaware LLC with LegalZoom

Whether you’re starting or dissolving a business, legal paperwork is rarely anyone’s favorite task. If you’d like some help, LegalZoom can help you fill out the cancellation form and file it with the Division of Corporations for as low as $129 + Delaware’s filing fee.

If you need legal guidance during the dissolution process, we can also connect you with an experienced business attorney who can offer advice at a transparent rate—wherever you are, no in-person visits needed. 

Delaware LLC dissolution FAQs

How much does it cost to dissolve a Delaware LLC?

As of 2025, it costs $220 to file a certificate of cancellation for a domestic LLC and $200 for a foreign LLC in Delaware. Optional filing fees include $50 for certified copies, $100 for 24-hour processing, and $200 for same-day service (in addition to the base filing fee). However, this doesn’t include the cost of paying outstanding taxes or debts. 

How long does Delaware dissolution take?

The Delaware Division of Corporations usually takes a few weeks to process the paperwork. If needed, you can opt for expedited processing (24-hour and same-day services available).  

Do I need to work with an attorney to dissolve an LLC?

While not legally required, it’s a good idea to consult an attorney to dissolve your LLC, especially if you have questions about handling final taxes, creditor claims, or distributions. They can also help you file the paperwork and ensure you address all matters before notifying the Delaware Division of Corporations.

What is the difference between dissolving and canceling an LLC? 

In Delaware, dissolving an LLC involves winding up the company’s affairs—settling debts, paying taxes, and distributing remaining assets to the LLC owners. Canceling is the final step where you file with the Delaware Division of Corporations to formally end the LLC (which also makes your company name available for use). 

Brette Sember, J.D., contributed to this article.