Frequently Asked Questions
Who is responsible for handling the winding up phase in Delaware?
In the process of a voluntary Delaware LLC cancellation, the winding up phase is a crucial step. This phase is essentially to tie up loose ends and not to embark upon anything new after the final vote to cancel the LLC. The responsibility of handling the winding up phase is usually given to one or more board members or managers who are appointed during the final meeting. The key tasks during the winding up phase include closing the business's physical locations, settling all business with customers and suppliers, selling or disposing of all company property, discharging or making arrangements for all liabilities, continued prosecution and defense of current lawsuits, distributing final assets among the LLC's members, and closing the LLC's bank account and making arrangements for paying the final dissolution-related fees. Delaware law also states that all liabilities must be discharged before any members may collect among final assets. This includes loans, taxes, contracts, or lawsuits. The law also specifies the order in which payments must be made, with all creditors and liability holders being paid first, followed by approved distributions to members, and then final distributions to members according to contribution and LLC share ownership.
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