Kentucky Dissolution Package to Dissolve Limited Liability Company LLC
KENTUCKY
LIMITED LIABILITY COMPANY
DISSOLUTION
STATUTORY REFERENCE
KENTUCKY REVISED STATUTES, §§ 275.285 through 275.325
A Kentucky limited liability company (LLC) may be dissolved
in three different ways: voluntarily, administratively, or judicially.
This form packet deals ONLY with the voluntary dissolution of a Kentucky
LLC.
Dissolution
A LLC is dissolved and its affairs are to be wound up at or upon the
first to occur of the following:
1. The time specified in the articles of organization or a
written operating agreement;
2. The happening of an event specified in the articles of organization
or a written operating agreement;
3. The written consent of a majority of the members of the LLC;
4. Entry of a decree of judicial dissolution under KRS 275.290 or the
filing by the Secretary of State of a certificate of dissolution under
KRS 275.295.
Winding Up
To achieve a voluntary dissolution of a LLC, and unless otherwise provided
in a written operating agreement, the business and affairs of the LLC may
be wound up by the members or managers who had the authority to manage
the LLC prior to dissolution.
A dissolved LLC continues its existence but may not carry on any business
except that necessary and appropriate to wind up and liquidate its business
and affairs. A dissolved LLC may:
1. Collect its assets.
2. Dispose of its properties that will not be distributed in kind to
its members.
3. Discharge or make provision to discharge its liabilities.
4. Distribute its remaining property among its members according to
their interests.
5. Do every other act necessary to wind up and liquidate its business
and affairs.
Dissolution of a LLC does NOT:
1. Transfer title to the LLC's property.
2. Prevent transfer of a LLC interest.
3. Subject the LLC members or managers to standards of conduct different
from those prescribed by the Kentucky LLC Act.
4. Change quorum or voting requirements for its members or managers.
5. Change provisions for selection, resignation, or removal of LLC
members or managers.
6. Change provisions for amending the LLC operating agreement.
7. Prevent commencement of a proceeding by or against the LLC in its
name;
8. Abate or suspend a proceeding pending by or against the LLC on the
effective date of dissolution;
9. Terminate the authority of the registered agent of the LLC.
10. Alter the obligations and responsibilities of the LLC as prescribed
by applicable federal or state law with regard to the filing or examination
of all federal and state tax returns or the payment, assessment, or collection
of any federal or state tax due.
Binding Acts of Members/Managers
After dissolution of the LLC, a member or manager having authority to
wind up the LLC's business and affairs may bind the limited liability company
by :
1. Any act appropriate for winding up the LLC's affairs or
completing transactions unfinished at dissolution.
2. Any other act that would have bound the LLC if it had not been dissolved,
but only if the other party to the transaction did not have notice of the
dissolution. The filing of articles of dissolution is presumed to
constitute notice of dissolution for this purpose.
An act of a member or manager which is not specifically binding on the
LLC pursuant to statute is binding if it is authorized by the LLC.
Distribution of Assets
Upon the winding up of a LLC, its assets must be used and distributed
as follows:
1. Payment, or adequate provisions for payment, must be made
to creditors, including members who are creditors, in satisfaction of liabilities
of the LLC.
2. Unless otherwise provided in a written operating agreement, to members
or former members in satisfaction of liabilities for distributions.
3. Unless otherwise provided in a written operating agreement, to members
and former members first for the return of their contributions and second
in proportion to the members' respective rights to share in distributions
from the LLC prior to dissolution.
Articles of Dissolution
When the LLC elects to dissolve and the winding up of the business is
commenced, Articles of Dissolution must be filed in the Office of the Secretary
of State.
Disposition of Claims
After filing the Articles of Dissolution, a LLC may dispose of the known
claims against it by notifying its known claimants, in writing, of the
dissolution after the effective date of dissolution. The written notice
must:
1. Describe information that must be included in a claim. Provide
a mailing address where a claim may be sent.
2. State the deadline (may fewer than one hundred twenty (120) days
after the later of the date of the written notice or the filing of articles
of dissolution) by which the LLC must receive the claim.
3. State that the claim will be barred if not received by the deadline.
A claim against a LLC is barred:
1. If a claimant who is given written notice does not deliver
the claim to the LLC by the deadline.
2. If a claimant whose claim was rejected by the LLC does not commence
a proceeding to enforce the claim within ninety (90) days after the date
of the rejection notice.
A "claim" does not include a contingent liability or a claim based on an
event occurring after the effective date of dissolution.
Publication of Notice of Dissolution
A dissolved LLC may publish notice of its dissolution. The notice
must:
1. Be published once in a newspaper of general circulation
in the county where the LLC's principal office, or, if none in Kentucky,
its registered office is or was last located.
2. Describe the information that must be included in a claim and provide
a mailing address where the claim may be sent.
3. State that a claim against the LLC will be barred unless a proceeding
to enforce the claim is commenced within two years (five years for a professional
LLC) after the publication of the
If a dissolved LLC publishes the statutorily prescribed newspaper notice,
the claim of each of the following claimants is barred unless the claimant
commences a proceeding to enforce the claim is commenced within the times
set out by statute:
1. A claimant who did not receive written notice under KRS
275.320.
2. A claimant whose claim was timely sent to the LLC but not acted
on.
3. A claimant whose claim is contingent or based on an event occurring
after the effective date of dissolution.
A claim may be enforced against a LLC to the extent of its undistributed
assets or, if the assets have been distributed in liquidation, against
a member of the LLC to the extent of that member's pro rata share of the
claim or the assets of the LLC distributed to the member in liquidation,
whichever is less. A member's total liability for all claims may
not exceed the total amount of assets, less liabilities assumed or taken
subject to, distributed to the member.
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