How to Dissolve an LLC in Minnesota: 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 Minnesota LLC by obtaining member consent, winding up the business, and filing a Statement of Termination with the Minnesota Secretary of State for $55 online or in person, or $35 by mail. Settle debts and taxes first - distributing assets before paying creditors can expose members to liability.

Minnesota Dissolution: Agency, Chapter, and Filings

A Minnesota LLC is closed under Chapter 322C, the Minnesota Revised Uniform Limited Liability Company Act, through the Minnesota Secretary of State. Dissolution is a two-concept process: dissolution starts the wind-up, and termination ends the entity's existence. Section 322C.0702 authorizes two optional public filings - a Statement of Dissolution during wind-up and a Statement of Termination to complete the close.

Importantly, dissolution is not automatic when members decide to stop. Section 322C.0702 provides that a dissolved company "continues after dissolution only for the purpose of winding up." That means you must actually settle the company's affairs before you file the Statement of Termination. This guide walks through the Minnesota-specific steps; for the national process see how to dissolve an LLC.

How to Dissolve a Minnesota LLC, Step by Step

Dissolving a Minnesota LLC is a five-step process. Each step maps to a requirement of Chapter 322C or a federal tax rule.

1. Approve dissolution. Under section 322C.0701, an LLC dissolves on the consent of all members, or upon an event specified in the operating agreement. Document the decision in a written consent or meeting minutes.
2. Wind up the business. Under section 322C.0702, discharge the company's debts and liabilities, settle and close its activities, and distribute any remaining assets to the members. Pay creditors before distributing to owners.
3. Settle Minnesota and federal taxes. File final Minnesota Department of Revenue returns, close your sales and withholding tax accounts, and file the final federal return with the IRS marked "final." A multi-member LLC files a final partnership return.
4. File the Statement of Termination. File the Statement of Termination with the Minnesota Secretary of State - $55 online or in person, or $35 by mail. You may also file an optional Statement of Dissolution earlier during wind-up.
5. Close accounts and cancel registrations. Cancel any assumed name (DBA), licenses, and permits, close the business bank account, and notify the IRS to close the EIN account.

Following these steps in order protects the members' liability shield and prevents the annual renewal obligation from continuing after you believe the business is closed.

What Legally Dissolves a Minnesota LLC

Section 322C.0701 lists the events that dissolve an LLC. The most common is the consent of all members. An LLC also dissolves upon an event specified in its operating agreement, or after 90 consecutive days with no members. Beyond voluntary dissolution, a court may order dissolution on application by a member - for example, where it is not reasonably practicable to carry on the company's activities, or where managers have acted illegally, fraudulently, or in a manner oppressive and directly harmful to the applicant.

There is also administrative termination under section 322C.0705 for failing to file the annual renewal, and judicial dissolution on application by the Attorney General under section 322C.0708. Only voluntary dissolution followed by a Statement of Termination gives you a clean, intentional close.

Winding Up: Paying Debts and Distributing Assets

Winding up is the substantive part of closing an LLC. Under section 322C.0702, the dissolved company must discharge its debts and liabilities, settle and close its activities, and distribute remaining assets. The statutory order matters: creditors are paid before members receive distributions. If members take assets while debts remain unpaid, they can be personally exposed to those obligations, undermining the liability protection an LLC normally provides.

If the LLC has no members left, the last member's legal representative may wind up the company; if that person declines, transferees owning a majority of interests can appoint someone to do it. A court can supervise the wind-up on request. Keep records of every payment and distribution - they document that you followed the statutory priority.

Settling Minnesota and Federal Taxes

Before filing the Statement of Termination, close out taxes. With the Minnesota Department of Revenue, file final returns and close your sales and use tax and withholding tax accounts so the state does not expect ongoing filings. If the LLC was taxed as a partnership, file a final Minnesota and federal partnership return; if it elected corporate treatment, file a final corporate return.

Federally, the IRS directs closing businesses to file a final income tax return and check the "final return" box, report the sale or disposition of business assets, and address employment taxes if you had employees. A corporation (including an LLC taxed as one) may need to file IRS Form 966. See the IRS "Closing a Business" checklist, and for the tax classification background, the national S-corp vs LLC comparison.

Minnesota Dissolution Fees (2026)

The table lists the Secretary of State filings involved in closing an LLC, verified against the state fee schedule. The internal steps - member consent, winding up - carry no state fee.

Common Mistakes That Leave an LLC Open

The most common error is assuming that simply not filing the annual renewal closes the LLC. It does not - it triggers administrative termination under section 322C.0705, which leaves unresolved debts and tax accounts and can force you to reinstate (for $25 by mail or $45 online) just to file a proper termination afterward. Another mistake is distributing assets to members before paying creditors, which can pierce the liability shield.

Owners also forget to cancel an assumed name, close sales-tax accounts, or notify the IRS to close the EIN account, leaving dangling obligations. Filing the Statement of Termination is the step that formally ends the entity; skipping it means the LLC technically still exists. For a general overview of these pitfalls, see how to dissolve an LLC and, if you formed recently, how to form an LLC in Minnesota.

Dissolution vs Termination: Why Both Terms Matter

Minnesota's statute uses two words that are easy to conflate. Dissolution is the decision and legal state that starts the wind-up; the company still exists, but only to settle its affairs. Termination is the end point - the moment the entity ceases to exist after wind-up is complete. Section 322C.0702 lets you signal each with an optional public filing: a Statement of Dissolution while you are winding up, and a Statement of Termination when you finish.

You are not required to file the Statement of Dissolution, but it can be useful to put third parties on notice that the company is winding up. The Statement of Termination is the filing that actually closes the record with the Secretary of State. Skipping it leaves the LLC technically in existence and still subject to the annual renewal, which is exactly the trap that produces surprise administrative terminations years later.

Handling Creditor Claims and Notice

A careful wind-up addresses known and potential creditors before members take anything. Under the priority in section 322C.0702, the dissolved company applies its assets first to discharge obligations to creditors, and only then distributes any remainder to members in accordance with their interests. Giving known creditors notice of the dissolution and a deadline to present claims helps close the books cleanly and limits the chance of a claim resurfacing after distribution.

If assets are insufficient to pay all debts, members generally should not take distributions at all, because doing so can make them personally answerable for amounts wrongly distributed. When claims are contested or the members disagree about the wind-up, section 322C.0701 allows a court to supervise the process. Documenting each creditor payment and each member distribution creates the paper trail that demonstrates you followed the statutory order. For the national framing of these duties, see how to dissolve an LLC.

Frequently Asked Questions

How much does it cost to dissolve an LLC in Minnesota?

Filing a Statement of Termination costs $55 online or in person, or $35 by mail. An optional Statement of Dissolution during wind-up costs the same. There is no state fee for approving dissolution internally. See Minnesota LLC cost.

What form dissolves a Minnesota LLC?

A Statement of Termination filed with the Minnesota Secretary of State under Chapter 322C ends the LLC. Chapter 322C also allows an optional Statement of Dissolution during wind-up; both are provided for in section 322C.0702.

Do I need member approval to dissolve a Minnesota LLC?

Yes, unless the operating agreement provides otherwise. Section 322C.0701 dissolves an LLC on the consent of all members or on an event specified in the operating agreement. Courts can order dissolution in limited situations.

What happens if I just stop filing the annual renewal?

The Secretary of State administratively terminates the LLC under section 322C.0705. That is not a clean wind-up: debts and tax duties remain, and you may need to reinstate for $25 by mail or $45 online to properly close. See annual renewal.

Do I have to settle taxes before dissolving?

Yes. File final Minnesota Department of Revenue returns, close sales and withholding accounts, and file a final federal return marked final. Paying creditors before distributing assets protects members from personal liability.

Related

• How to dissolve an LLC (cluster hub)
• How to form an LLC in Minnesota
• Minnesota LLC annual renewal and taxes
• Minnesota registered agent requirements
• Minnesota LLC cost
• Business license in Minnesota
• How to get an EIN
• S-corp vs LLC

Sources

1. Minnesota Statutes - § 322C.0701, Events Causing Dissolution (member consent; operating-agreement events; judicial dissolution).
2. Minnesota Statutes - § 322C.0702, Winding Up; Statement of Dissolution and Termination.
3. Minnesota Statutes - § 322C.0705, Administrative Termination.
4. Minnesota Statutes - § 322C.0706, Reinstatement ($25 reinstatement fee).
5. Minnesota Statutes - § 322C.0708, Dissolution on Application by Attorney General.
6. Minnesota Secretary of State - Business Filing & Certification Fee Schedule (PDF) ($35/$55 Statement of Dissolution and Termination; $25/$45 reinstatement).
7. Minnesota Statutes - § 322C.0703, Known Claims Against Dissolved LLC.
8. Minnesota Department of Revenue - Business Taxes (closing sales/use and withholding accounts).
9. IRS - Closing a Business (final return; final-box checklist).
10. IRS - Canceling an EIN – Closing Your Account.
11. Legal Information Institute (Cornell) - Dissolution (Wex).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. This is general information, not legal advice. Laws and fees change; verify current requirements with the Minnesota Secretary of State, Minnesota Department of Revenue, and IRS before acting.