How to Dissolve a US LLC as a Non-Resident

Closing a US LLC properly takes a few specific filings, and skipping them is how founders end up with penalty notices years after they stopped using the company. Here is the correct order to do it.

Why closing an LLC properly actually matters

A US LLC does not disappear just because you stop using it. Until you formally dissolve it with the state and tell the IRS you are done, the LLC is still considered active. That means annual report fees keep accruing, franchise taxes keep piling up in some states, and you may still be required to file Form 5472 every year even with zero activity. Missing that filing carries a penalty of $25,000 per year, and it applies whether or not the LLC made any money. Non-resident founders who assume an inactive company is a harmless one are the most common victims of this.

Proper dissolution is really three separate jobs: winding up the business itself, closing it with the state, and closing it with the IRS. Skipping any one of the three leaves a loose end that can turn into a penalty later.

Step 1: Wind up the business first

Before you file anything, settle what the LLC actually owes and owns. This is called winding up under most state LLC statutes, and it usually means:

• Paying off any known debts, vendor invoices, or subscriptions tied to the LLC
• Collecting any outstanding payments owed to the LLC
• Distributing remaining cash or assets to the members
• Cancelling any contracts, leases, or third-party services still running under the LLC's name

If you have members other than yourself, most operating agreements require a formal vote or written consent to dissolve. Even as a sole member, it is worth documenting the decision with a simple dated resolution for your own records.

Step 2: File the dissolution paperwork with the state

Every state calls this something slightly different. Wyoming and most states use Articles of Dissolution. Delaware calls it a Certificate of Cancellation. Whatever the name, the filing is submitted to the Secretary of State (or equivalent) where the LLC was formed.

Before the state will accept it, the LLC usually needs to be in good standing, meaning any overdue annual report or franchise tax must be paid first. This is the step people skip, then wonder why their dissolution gets rejected. If the LLC was registered as a foreign entity in any other state (because you had a physical presence or employees there), you also need to file a separate withdrawal of foreign registration in that state, or it will keep accruing its own fees independently.

Your registered agent should stay active until the dissolution is confirmed by the state. Cancelling the agent too early can mean you miss the confirmation, or miss a rejection notice that needs fixing.

Step 3: File the LLC's final federal tax return

This is the step non-resident founders most often get wrong, because it is easy to assume that once the state dissolution is filed, the IRS side takes care of itself. It does not.

For a single-member LLC owned by a non-US person, which is treated as a disregarded entity, you are required to file a final Form 5472 along with a pro-forma Form 1120, and check the box marking it as a final return. This is required even if the LLC had no income and even if you dissolved partway through the year. The 5472 is an information return, it does not calculate tax owed, but not filing it triggers the same $25,000 penalty as any other year. If the LLC has multiple members, it is generally treated as a partnership and files a final Form 1065 instead.

The final return is due by the normal filing deadline for that tax year (April 15, or October 15 if you filed for an extension), not immediately when you dissolve. Mark your calendar so this does not slip through simply because the company no longer feels active to you.

Step 4: Close the EIN with the IRS

An EIN itself is never reused and never technically expires, but the IRS lets you formally close the associated business account. To do this, send a letter to the IRS (currently to the Cincinnati, OH service center used for EIN matters) stating the legal name, EIN, business address, and the reason you are closing the account, and request that they close it. Include a copy of the original EIN confirmation notice if you still have it. This is a courtesy step rather than a legal requirement, but it removes the LLC from active IRS records and reduces the chance of confused correspondence later.

Step 5: Close the bank account and cards

Wait until the state dissolution is confirmed and any final payments (including a possible tax refund) have cleared before closing your US business bank account. Cancel any business cards tied to the LLC, download final statements for your records, and confirm in writing with the bank that the account and any related credit facility are closed. Providers like Mercury, Wise, and Relay can usually handle this entirely remotely, same as they handled the original account opening.

Common mistakes that cause ongoing penalties

Key terms

Articles of Dissolution / Certificate of Cancellation: the filing submitted to a state to formally end an LLC's existence. Winding up: the process of settling debts and distributing remaining assets before dissolution. Disregarded entity: a single-member LLC that is not taxed separately from its owner for federal purposes. Form 5472: an information return required from foreign-owned disregarded entities, filed alongside a pro-forma Form 1120. Good standing: a state status confirming an LLC has no overdue fees or filings, usually required before dissolution is accepted. Registered agent: the in-state contact required to receive legal and state correspondence on the LLC's behalf.

If you formed the LLC through a service, use it to close it too

If you used a formation service or a done-for-you provider to set up your LLC, EIN, and bank account, it is worth checking whether they also support closure. Founders Credit sets up US LLCs, ITINs, EINs, and business banking for non-resident founders remotely, and part of doing that responsibly is making sure clients understand what proper closure looks like when the time comes, rather than leaving a dormant entity racking up fees and compliance exposure in the background.

Frequently asked questions