How to Dissolve an LLC in Delaware: Steps & Cost (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

You dissolve a Delaware LLC by approving dissolution, winding up the business under the Delaware LLC Act, paying all annual taxes owed, and filing a Certificate of Cancellation with the Delaware Division of Corporations for a $200 fee. Delaware will not cancel the LLC until its flat $400 annual tax and any penalties are paid.

Two Steps: Dissolution, Then Cancellation

Closing a Delaware LLC involves two distinct legal events. Dissolution under Section 18-801 of the Delaware Limited Liability Company Act (Title 6, Chapter 18) starts the wind-down; the LLC still exists but only to settle its affairs. Cancellation under Section 18-203 ends the LLC entirely when you file a Certificate of Cancellation. Between the two, you wind up the business under Section 18-803. Skipping the wind-up or filing before taxes are paid causes problems, so follow the order below. For the national process, see the dissolution overview.

How to Dissolve a Delaware LLC, Step by Step

1. Approve the dissolution. Dissolve the LLC in the way its LLC agreement provides - often a stated event or a vote or written consent of members. Section 18-801 lists the events that trigger dissolution. Record the decision in your minutes or written consent.
2. Wind up the business. Under Section 18-803, the persons winding up collect the LLC's assets, prosecute and defend claims, pay or make reasonable provision for creditors, and distribute any remaining assets to members. Do this before you cancel, because cancellation ends the entity.
3. Pay all Delaware annual taxes. Bring the LLC current on the flat $400 annual tax for the relevant years, plus any $200 penalty and 1.5% monthly interest that accrued. Delaware will not accept the cancellation while taxes are outstanding. See Delaware LLC annual tax and filing requirements.
4. File the Certificate of Cancellation. Submit the certificate to the Delaware Division of Corporations and pay the $200 fee. Filing it cancels the certificate of formation and legally ends the LLC.
5. Close accounts and file final returns. Close the Delaware business license and gross receipts account with the Division of Revenue, file final federal tax returns (checking the "final return" box), and close the LLC's bank accounts and EIN-linked accounts.

Cost to Dissolve a Delaware LLC (2026)

The table below lists the charges involved in closing a Delaware LLC, each verified against the Delaware Code and Division of Corporations. Amounts are effective for 2026.

Expedited cancellation is available for an additional fee. Because expedite and copy fees change, confirm the current amount with the Division of Corporations before filing.

Winding Up: Paying Creditors and Members

Winding up under Section 18-803 protects both creditors and members. During wind-up, the LLC continues to exist for the limited purpose of settling its affairs. The people in charge - typically the managers or members - collect what the LLC is owed, pay or set aside funds for known and potential liabilities, and only then distribute anything left to the members. Under Delaware law, distributing to members before providing for creditors can expose recipients to clawback claims. If the LLC has significant debts or disputes, complete the wind-up carefully; the cancellation you file next assumes the business has been properly settled.

Order matters during wind-up. Delaware's LLC Act sets a priority for distributing assets: the LLC first pays or provides for creditors, including members who are creditors in a capacity other than as members, then satisfies any distributions owed to former members, and only then distributes what remains to current members. Following that order protects the people winding up from personal exposure. If the LLC's liabilities exceed its assets, do not distribute anything to members - paying owners ahead of creditors is exactly the kind of act that can be unwound later. When the numbers are close or contested, completing the wind-up carefully, and documenting it, is time well spent.

The Certificate of Cancellation

The Certificate of Cancellation under Section 18-203 is the document that ends the LLC. It identifies the LLC by name, states the date its original certificate of formation was filed, and confirms cancellation. Filing it with the Division of Corporations and paying the $200 fee cancels the certificate of formation. A certificate of formation is also canceled automatically in other situations - for example, on completion of a merger where the LLC is not the survivor - but for a straightforward close, the Certificate of Cancellation is the document you file.

You can also set a future effective date on the certificate if you want the cancellation to take effect at the end of a month or quarter rather than the day you file. That timing can matter for a clean set of final books. Once the certificate is accepted, the LLC's legal existence ends except for any wind-up matters the law lets it finish. Keep the stamped, accepted copy: it is your proof that the entity was closed, which you may need if a taxing authority or creditor later questions the LLC's status.

Why You Must Settle the Annual Tax First

Delaware ties cancellation to tax compliance. Because the LLC owes the flat $400 annual tax under Section 18-1107 every year until it is canceled, an LLC that files late in its life may owe tax for the current year. The Division of Corporations requires those taxes - plus any $200 penalty and 1.5% monthly interest - to be paid before it accepts the cancellation. Paying the tax and filing the cancellation in the same window avoids a new year's tax attaching. See Delaware LLC cost for how these amounts add up.

Note that the Delaware LLC annual tax is different from the Certificate of Account Status or tax clearance that some other states require before dissolution. Because a Delaware LLC files no income return with the state unless it operated in Delaware, there is usually no separate clearance step beyond being current on the flat annual tax. If your LLC did do business in Delaware and held a business license, close that gross receipts account with the Division of Revenue as part of the wind-up; the annual tax to the Division of Corporations and the gross receipts obligations to the Division of Revenue are tracked separately, so clear both.

Members sometimes disagree about whether or how to dissolve. If the LLC agreement does not resolve the deadlock, Delaware law allows a member or manager to seek judicial dissolution from the Court of Chancery when it is no longer reasonably practicable to carry on the business in conformity with the agreement. That is a court proceeding, not a filing with the Division of Corporations, and it is a last resort. For most LLCs, dissolution is a straightforward internal decision followed by the wind-up and cancellation steps above; the judicial route matters mainly for disputes among owners. If you do go to court, the cancellation filing still happens at the end - a court order to dissolve does not remove the requirement to wind up and file the Certificate of Cancellation with the Division of Corporations, and the $200 fee and any unpaid annual tax remain part of closing the entity.

What Happens If You Just Abandon It

Some owners stop using an LLC without formally canceling it. That is risky. The flat $400 annual tax keeps accruing every June 1, along with the $200 penalty and 1.5% monthly interest. After three years of nonpayment, Delaware cancels the certificate of formation by operation of law under Section 18-1108 - but the back taxes are not forgiven. If you later want to revive the LLC or get a clean closure, you must pay everything owed. Filing the Certificate of Cancellation now, while current, is cheaper and cleaner than letting it lapse.

After Cancellation: Records and Other States

After the LLC is canceled, keep its records for several years in case of later tax questions or claims. If the LLC was registered to do business (foreign-qualified) in other states, withdraw in each of those states so their annual fees stop. Cancel any assumed names, permits, and the Delaware business license and gross receipts account. If you might start a new venture, review how to form an LLC in Delaware and S-corp vs LLC before you refile.

On the federal side, closing is more than a state filing. File a final federal income-tax return for the LLC and check the box indicating it is the final return; a multi-member LLC files a final partnership return and issues final Schedule K-1s to members. If the LLC had employees, make final payroll deposits and file the final employment-tax returns. You do not "cancel" an EIN - the IRS keeps the number permanently assigned to the business - but you can ask the IRS to close the business account associated with it. Handling these final returns is what actually stops federal filing obligations from carrying forward.

A quick timing note: because the flat $400 tax attaches every June 1, cancelling before that date in the LLC's final year can avoid picking up another year's tax. If your wind-up is nearly complete in the spring, it is often worth finishing the cancellation ahead of June 1 rather than letting a new annual tax accrue for an entity you are closing anyway.

Frequently Asked Questions

How do I dissolve an LLC in Delaware?

Approve dissolution, wind up the business under Section 18-803, pay all annual taxes owed, and file a Certificate of Cancellation with the Division of Corporations for $200. Filing cancels the certificate of formation.

How much does it cost to dissolve a Delaware LLC?

The Certificate of Cancellation costs $200. You must also be current on the flat $400 annual tax, plus any $200 penalty and 1.5% monthly interest for prior unpaid years.

Do I have to pay the annual tax to close a Delaware LLC?

Yes. Delaware requires all annual taxes - the flat $400 for the relevant years plus penalties and interest - to be paid before it accepts the Certificate of Cancellation.

What happens if I abandon my Delaware LLC?

The $400 tax keeps accruing with a $200 penalty and 1.5% monthly interest. After three years unpaid, the certificate of formation is canceled by law, but the back taxes remain owed.

What is winding up a Delaware LLC?

Under Section 18-803, it is settling the LLC's affairs after dissolution: collecting assets, paying or providing for creditors, and distributing any remaining assets to members before cancellation.

Related

• How to dissolve an LLC (cluster hub)
• How to form an LLC in Delaware
• Delaware LLC cost and annual tax
• Delaware LLC annual tax and filing requirements
• Delaware registered agent requirements
• How to get a Delaware business license
• How to get an EIN
• What is an LLC?

Sources

1. Delaware Code, Title 6, Chapter 18, Subchapter VIII - Dissolution (§18-801) and Winding Up (§18-803).
2. Delaware Code, Title 6, Chapter 18, Subchapter II - Cancellation of Certificate (§18-203).
3. Justia - Delaware Code §18-803, Winding up.
4. Justia - Delaware Code §18-203, Cancellation of certificate.
5. Delaware Code, Title 6, Chapter 18, Subchapter XI - Annual tax (§18-1107); Fees (§18-1105, $200 cancellation); Cancellation for nonpayment (§18-1108).
6. Delaware Division of Corporations - Pay LLC/LP/GP Taxes (taxes must be current to cancel).
7. Delaware Division of Corporations - Annual Report and Tax Information (penalty and interest).
8. Delaware Division of Revenue - Step 3: Licensing & Registration (closing license/gross receipts accounts).
9. IRS - Closing a Business (final returns; closing the EIN account).
10. Legal Information Institute (Cornell) - Winding up (Wex definition).

LegalGlass provides general information for educational purposes and is not legal advice, is not a law firm, and is not a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the Delaware Division of Corporations before acting.