DISSOLUTION OF LLCs

Once an LLC is dissolved, it continues in existence only to wind up its activities and affairs.  Once all known property and assets of the LLC have been applied and distributed pursuant to the Arizona LLC Act, Articles of Termination must be filed with the Arizona Corporation Commission.
An LLC may rescind its dissolution unless the Articles of Termination have become effective, a court has entered an order pursuant to A.R.S. §29-3701(A)(4) or the Arizona Corporation Commission has administratively dissolved the LLC. Unlike with corporations, there is no mechanism for voluntarily revoking Articles of Termination once they have been approved by the Arizona Corporation Commission. Essentially, once the Articles of Termination are approved, the LLC is dissolved and cannot be revived. However, if the Articles of Termination have not been approved and the LLC wishes to withdraw them the LLC may file a Statement of Withdrawal.  If the Articles of Termination have already been approved and the LLC wants to begin operating again, it would need to form a new LLC.
Conversely, LLCs that have been administratively dissolved pursuant to A.R.S. §29-3708 may apply for reinstatement within six years of the effective date of the administrative dissolution.  If the Arizona Corporation Commission denies the request for reinstatement, the Arizona LLC Act provides a mechanism for judicial review of the denial.
Winding up the dissolved LLC’s activities and affairs

 	►Under the Arizona LLC Act, an Operating Agreement may modify events of dissolution except that the LLC must be dissolved when it is no longer practicable to carry on the LLC’s affairs in conformity with the Articles of Organization or Operating Agreement or upon judicial dissolution.63 The Act also provides a means to notify known and unknown creditors of the LLC and shorten their time to make claims to 120 days for known claims and three years for unknown claims.64 This procedure is similar to the dissolution procedures for Arizona corporations. An LLC may file a Notice of Winding Up with the Arizona Corporation Commission, but there is no mandatory requirement to do so.65
	
In winding up the LLC’s activities and affairs, an LLC:
1. 	Shall discharge the company’s debts, obligations and other liabilities, settle and close the company’s activities and affairs and marshal and distribute the assets of the LLC; and
 	2. 	May do all of the following:
 		a. 	File a Notice of Winding Up with the Arizona Corporation Commission stating the name of the LLC, that the LLC has commenced to wind up its activities and affairs and any other statements not prohibited by law; 	
b. 	Preserve the LLC activities, affairs and property as a going concern for a reasonable time;
 		c.	Prosecute and defend actions and proceedings, whether civil, criminal or administrative;
 		d.	Transfer the LLC’s property;
 		e.	Settle disputes by mediation or arbitration; and
 		f.	Perform other acts necessary or appropriate to the winding up.

 	The Act also allows for the judicial supervision of the winding up of an LLC.
	 
During the process of winding up, a dissolved LLC must apply its assets to discharge the LLC’s obligations to its creditors (including to members who are creditors).  After the dissolved LLC has discharged its debts to its creditors, any surplus assets must be distributed in the following order (only subject to a charging order pursuant to A.R.S. §29-3503):
1. 	To each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and then
2.	Among persons owning transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the LLC.
 
If an LLC does not have sufficient surplus assets to distribute to each person owning a transferable interest that reflects contributions made and not previously returned, then any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.  All distributions made pursuant to A.R.S. §29-3707(B) and (C) must be paid in cash.
 
Notice to known and unknown claimants of a dissolved LLC

	A dissolved LLC may choose to give notice of its dissolution to known and unknown claimants to shorten the statute of limitations for bringing a claim against it.  The notice provisions of the Arizona LLC Act do not affect the enforcement of liens or claims covered by liability insurance. Additionally, the notice provisions do not affect the statute of limitations on any claims that arise after the dissolution of the LLC.
A dissolved LLC may notify its known claimants by sending them a notice that complies with all of the following:
 
1. 	Specifies the information required to be included in a claim;
 	2. 	States that a claim must be in writing and provide a mailing address to which the claim is to be sent;
 	3. 	States the deadline for receipt of a claim which may not be less than 120 days after the date the notice is received by the claimant; and
 	4. 	States that the claim will be barred if not received by the deadline.

	Any claims that a dissolved LLC receives pursuant to these provisions may also be barred if the notice requirements of A.R.S. §29-3704(B) were not met and any of the following occurs:
1. 	The claim is not received by the specified deadline; or
 	2. 	The claim is timely received but rejected by the LLC and both of the following occur:
a.	The LLC sends the claimant a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the LLC to enforce the claim withing 90 days of the claimant receiving the notice; and
b.	The claimant does not commence the required action within 90 days after the claimant receives the notice.
The provisions for providing notice to unknown claimants are substantially the same as those for known claimants.  However, in the case of potential unknown claimants the Notice of Winding Up must be filed with the Arizona Corporation Commission and published at least once in a newspaper of general circulation in the county where the LLC’s principal address is located in the State of Arizona and if the LLC’s principal address is not in the State of Arizona, the publication must occur in the county where the LLC’s statutory agent is or last was located.  The statute of limitations for bringing an unknown claim is three years after the publication of the notice or the date of filing the notice with the Arizona Corporation Commission, whichever is later.
	A dissolved limited liability company may also apply to the appropriate County Superior Court for a determination of the amount and form of security to be provided for the payments of claims that are reasonably expected to arise after the date of dissolution.

Notice of winding up upon dissolution

NOTICE OF WINDING UP

1.	The name of the limited liability company is:  [NAME], LLC.

2.	The initial Articles of Organization were filed on [DATE].

3.	 The limited liability company has commenced to wind up its activities and affairs pursuant to ►A.R.S. Title 29, Chapter 7.

The person signing below declares and certifies under penalty of law that the information contained within this document together with any attachments is true and correct and is submitted in compliance with Arizona law.
►

►Dated: [date of signing]

►► ______________ 
[Name of signator]
[Description of authority to sign – as either an individual or as an individual signing on behalf of a company]

Notes to Form

 	►►This form may be used either prior to or after dissolution of the LLC.  

Notice to known claimants of a dissolved LLC

NOTICE TO CREDITORS OF THE DISSOLUTION OF
 [NAME OF LLC], LLC

	Pursuant to A.R.S. §29-3704, notice is hereby given that [name of LLC], LLC has been dissolved on [date of dissolution].

	You may have a claim against the LLC.  Unless you submit your claim by following the instructions below, your claim against the LLC will be barred.

	Please mail your claim against the LLC in writing to [insert name and address of party to receive claims] by [insert date for deadline of claims that is at least 120 days from the date of this notice – allow five additional days for mailing].  If you do not submit your claim by [date], it will be barred.  To substantiate your claim or debt, please include the following information and documentation with your claim:

1.	The Creditor’s name, address, and phone number;
2.	The date the debt/claim was incurred;
3.	The nature of the claim/debt; and
4.	Any documentation in support of the creditor’s debt/claim.

►
►►Signed: ____	►Date: __	

►
►
►
►
►
►►Print Name: ____	►[ ] manager	►[ ] member	►[ ] authorized agent	
►► 	►	►	►	
►►__________	►	►		
►►If signing on behalf of a company, print company name.				

Notes to Form

 	A dissolved LLC may choose to give notice of its dissolution to known and unknown claimants to shorten the statute of limitations for bringing a claim against it.  There is no requirement to file the notice for known claimants with the Arizona Corporation Commission.  There is also no requirement to mail the notice by any other method than be regular U.S. mail.  However, it would behoove the careful practitioner to send the notice via means where it can be tracked and proven that it was delivered as the deadline for bringing the claim commences upon receipt of the notice.  Sending the notice by certified mail and by certified return receipt would be effective even if the recipient did not sign the return receipt.

Notice to unknown claimants of a dissolved LLC

NOTICE TO CREDITORS OF THE DISSOLUTION OF
 [NAME OF LLC], LLC

	Pursuant to A.R.S. §29-3705, notice is hereby given that [name of LLC], LLC has been dissolved on [date of dissolution].

	You may have a claim against the LLC.  Unless you commence an action to enforce your claim within three (3) years of the publication of this notice, it will be barred.
	Please mail your claim against the LLC in writing to [insert name and address of party to receive claims] within three (3) years from the date of this publication.  If you do not commence an action to enforce your claim within three (3) years of the date of this publication, it will be barred.  To substantiate your claim or debt, please include the following information and documentation with your claim:

1.	The Creditor’s name, address, and phone number;
2.	The date the debt/claim was incurred;
3.	The nature of the claim/debt; and
4.	Any documentation in support of the creditor’s debt/claim.

►
►►Signed: ____	►Date: __	

►
►
►
►
►
►►Print Name: ____	►[ ] manager	►[ ] member	►[ ] authorized agent	
►► 	►	►	►	
►►__________	►	►		
►►If signing on behalf of a company, print company name.	

			
Notes to Form

 	A dissolved LLC may choose to give notice of its dissolution to known and unknown claimants to shorten the statute of limitations for bringing a claim against it.  This form must be filed with the Arizona Corporation Commission and published at least once in a newspaper of general circulation in a county where the dissolved LLC’s principal address is located or if the 
LLC’s principal address is not located in Arizona, then in the county where the LLC’s statutory agent is or was last located.  

Notice of rejection of claim against dissolved LLC

NOTICE OF REJECTION OF CLAIM AGAINST
 [NAME OF LLC], LLC

	Pursuant to A.R.S. §29-3704, notice is hereby given that [name of LLC], LLC has rejected your claim against it.  If you wish to pursue this claim further, you must commence and action against the Company to enforce the claim by [insert date for deadline to commence an action that is at least 90 days from the date of this notice – allow five additional days for mailing].  If you do not commence an action by [date inserted above], your claim will be forever barred.

►
►►Signed: ____	►Date: __	

►
►
►
►
►
►►Print Name: ____	►[ ] manager	►[ ] member	►[ ] authorized agent	
►► 	►	►	►	
►►__________	►	►		
►►If signing on behalf of a company, print company name.	

			
Notes to Form

 	A dissolved LLC may reject any claims that it receives by sending the claimant the notice contained herein.  If the claimant does not commence an action to enforce the rejected claim within 90 days after receipt of the notice of rejection, the claim is barred from enforcement.  There is also no requirement to mail the notice by any other method than be regular U.S. mail.  However, it would behoove the careful practitioner to send the notice via means where it can be tracked and proven that it was delivered as the deadline for bringing the claim commences upon receipt of the notice.  
Articles of termination
►ARTICLES OF TERMINATION 
►Pursuant to ►A.R.S. §29-3702

►1. 
 	►The name of the limited-liability company is: [NAME OF COMPANY], LLC
►2. 
 	►All known properties and assets of the limited liability company have been applied and distributed in accordance with ►A.R.S. Title 29, Chapter 7.
►
The person signing below declares and certifies under penalty of law that the information contained within this document together with any attachments is true and correct and is submitted in compliance with Arizona law.
►

►Dated: [date of signing]

►► ______________ 
[Name of signator]
[Description of authority to sign – as either an individual or as an individual signing on behalf of a company]

Notes to Form

 	►►A.R.S. §29-3702(H) requires that written Articles of Termination be filed with the Arizona Corporation Commission once all of the known property and assets of an LLC have been applied and distributed pursuant to Arizona LLC Act.