Introduction
Closing an LLC in Texas is a two-part process: first you wind up the business, then you formally terminate it with the state. “Winding up” means stopping normal operations, settling accounts, paying or providing for debts, and distributing any remaining assets to members under the operating agreement and Texas law. Only after that should you file the state paperwork that officially ends the company’s legal existence.
Texas uses a specific form—the Certificate of Termination (Form 651)—to finalize closure for a domestic LLC. Along with that filing, you generally need proof from the Texas Comptroller that your franchise tax obligations are satisfied (a Certificate of Account Status for termination). These two pieces—correct winding up and proper filings—are what convert a business that has “stopped operating” into one that is legally terminated.
Because taxes don’t end the day you flip the “closed” sign, you’ll also handle final state franchise tax tasks and any closing steps for sales and use tax permits. If you’re a foreign (out-of-state) LLC registered to do business in Texas, your path is slightly different: you terminate or withdraw your Texas registration, using Form 612 or Form 608, depending on whether your home-state entity still exists.
Finally, remember there’s a federal layer. After the Texas termination, you still file final federal tax returns, wrap up payroll reporting, and request that the IRS close your business account (your EIN stays assigned but can be deactivated). Treat these checklists as part of the same finish line so nothing lingers after the LLC is gone.
1) How do I dissolve a Texas LLC legally?
Start with your operating agreement. Record member consent to dissolve in the manner it prescribes. If your agreement is silent, follow the default voting rules in Texas law. Once the decision is approved, you enter “winding up,” which means stopping normal business and taking only those actions needed to close: notify known claimants, collect receivables, liquidate or distribute assets, and resolve liabilities. Keep written minutes and resolutions; these records support your state filings.
After winding up, file a Certificate of Termination (Form 651) with the Texas Secretary of State and include any required Comptroller certificate showing franchise taxes are satisfied. When the Secretary of State accepts the filing, the LLC’s legal existence ends, but you should retain books and records for audit and legal purposes.
2) What are the steps to file a Texas LLC Certificate of Termination?
Confirm that the LLC has properly approved dissolution and completed winding up tasks. Then complete Form 651. The form asks for your entity name, file number, the event requiring winding up (usually a voluntary decision), and statements confirming that debts are addressed and property has been distributed, per the Texas Business Organizations Code. The filing fee is $40. You can submit by mail, in person, fax with a payment form, or electronically via SOSDirect.
Sign the form with an authorized person (member/manager) and attach the Comptroller’s Certificate of Account Status for termination if required for your situation. Make sure your registered agent information and principal office are current; returned mail or mismatched names can delay processing. Keep a stamped copy with your final company records after the state accepts it.
3) Do I need a Comptroller Certificate of Account Status to close a Texas LLC?
In most cases, yes—you’ll request a “Certificate of Account Status for Termination” from the Texas Comptroller after filing your final franchise tax report and paying amounts due. This certificate is specific to termination and differs from a general account-status page. The Secretary of State typically requires this specialized certificate with your termination filing, so handle your final tax reporting before you submit Form 651.
Request the certificate through the Comptroller’s online system after ensuring your account is in good standing and any outstanding reports are complete. If you converted or merged rather than terminated, the Comptroller has separate guidance and may not require the termination certificate. Always match your tax pathway (terminate, convert, withdraw) to the correct Comptroller document.
4) What franchise tax filings are required to dissolve an LLC in Texas?
Texas imposes a final franchise tax report requirement when an entity ceases doing business in the state. You’ll file a final report for the period ending when you stopped doing business and pay any tax due. The final report generally comes due shortly after you indicate closure, and the Comptroller’s Webfile system will open that ending period once you initiate the process. Only after filing and paying should you request the Certificate of Account Status for termination.
If your entity is exempt or below thresholds, you still typically submit the appropriate no-tax-due or information report for that final period. Coordinate your final franchise filing with your Secretary of State termination so there’s no gap that triggers another annual obligation.
5) How do you wind up a Texas LLC and notify creditors?
Texas law spells out the winding-up checklist. The LLC must cease normal operations except as needed to close, notify each known claimant in writing, collect and sell property if not distributing in kind, pay or provide for all liabilities, and then distribute any remaining property to members according to their rights. You may also continue or defend lawsuits during winding up as necessary. Keep documentation of notices and settlements.
These steps protect members and show the state that the LLC addressed obligations before termination. If liabilities exceed assets, Texas law requires applying property to debts in a just and equitable manner and making adequate provision for remaining obligations before member distributions. Solid recordkeeping here will help if issues arise after termination.
6) How do I cancel sales tax and other Texas permits before LLC termination?
If your LLC holds a Texas sales and use tax permit or other state tax accounts, close them with the Comptroller. For sales tax, use the account-maintenance tools to mark a location closed and end your collection responsibilities. Make any final filings and payments. If you’re also terminating the entity itself, follow the Comptroller’s separate “reinstate or terminate” guidance for franchise tax, then proceed to your Secretary of State filing.
Handle local permits and licenses (health permits, alcohol, etc.) directly with the issuing agencies. The aim is a clean slate—no open tax or permit accounts—when you request the Comptroller’s Certificate of Account Status for termination and file Form 651.
7) How do foreign LLCs withdraw or terminate registration in Texas?
A foreign (out-of-state) LLC that still exists in its home state but no longer does business in Texas typically files a Certificate of Withdrawal of Registration (Form 608) with the Secretary of State. If the foreign LLC has ceased to exist in its home state (for example, it dissolved there), it files a Termination of Registration (Form 612) and includes evidence of that home-state termination. Both filings generally require a Comptroller certificate confirming that franchise taxes are satisfied.
The form instructions explain which form to choose and note the filing fee (commonly $15 for foreign entities). Attach the right documents, have an authorized person sign, and keep a copy for your records once accepted.
8) How long does it take and what are the fees to close a Texas LLC?
For a domestic LLC, the Secretary of State fee to file a Certificate of Termination (Form 651) is $40. Foreign withdrawals or terminations commonly carry a $15 filing fee. Processing times vary based on submission method and workload; electronic SOSDirect filings are often faster than mail. The biggest timing variable is usually your tax close-out—filing the final franchise report and obtaining the Comptroller’s specialized Certificate of Account Status for termination.
To keep the timeline tight, coordinate three tracks at once: finish winding up tasks, complete final franchise filings, and prepare your Secretary of State packet. Submitting a clean, complete filing with the proper Comptroller certificate helps avoid back-and-forth that can delay termination.
9) What happens to debts and contracts when closing a Texas LLC?
During winding up, the LLC must pay or make adequate provision for all liabilities before distributing any assets to members. If assets are insufficient, Texas law directs the company to apply property in a just and equitable manner to discharge obligations, then distribute any remainder according to member rights. This framework ensures creditors are addressed before members receive anything.
Contracts can be assigned, terminated per their terms, or settled. Keep written releases or payoff letters. Because the LLC can still prosecute and defend actions during winding up, you can resolve disputes, collect receivables, and finalize agreements as you close. Good records reduce post-termination surprises.
10) After Texas termination, what federal (IRS) steps should an LLC take?
File final federal returns appropriate to your tax classification: partnerships file a final Form 1065; corporations file a final Form 1120 or 1120-S; disregarded entities report on the owner’s return. If you had employees, file final Forms 941/944 and 940 and issue final W-2s. Report contractor payments on Forms 1099-NEC where applicable. Then ask the IRS to close your business account; your EIN remains assigned but can be deactivated. Keep records for the recommended retention period.
The IRS also publishes closing-a-business checklists and reminders (like keeping records and paying any balance due). Tie these federal steps to your state termination date so filings align.