How to Dissolve an LLC in Texas: Form 651 and the Tax Certificate

Texas LLC dissolution at a glance

Texas calls the final filing a certificate of termination, not articles of dissolution. The Secretary of State (SOS) summary for a limited liability company is short:

• Form: Form 651, Certificate of Termination of a Domestic Entity.
• Fee: $40.
• Who signs: an authorized manager, or an authorized managing member if the LLC is member-managed.
• Attachment: a Certificate of Account Status for Termination from the Texas Comptroller (Form 05-305).
• Where: online through SOSDirect or SOSPortal, or by mail if you cannot file online.

The hard part is not the form. It is the Comptroller's certificate, because you only get it once every tax account is filed, paid and closed.

Step 1: Wind up the LLC under Chapter 11

The SOS instructions say that once the owners decide the entity should end, it should wind up its business and affairs as Chapter 11 of the Texas Business Organizations Code (BOC) provides. Only after winding up is complete does the LLC file the certificate of termination. The SOS says it cannot give business or legal advice on how to wind up, and points you to the governing documents, Texas law and a private attorney.

What winding up usually involves

In practice, winding up means stopping new business, collecting receivables, selling or distributing assets, paying or settling debts, and closing contracts, accounts and licenses. Do this before you file: the certificate of termination includes a statement that the LLC has complied with the BOC's winding-up provisions.

Assets that are easy to forget

Domains, software licenses, intellectual property and company data are assets too. A CRM, a support-ticket history or years of internal chat can have buyers. Sell them while the LLC still exists, and handle any privacy restrictions first.

Step 2: Clear franchise tax with the Comptroller

The Comptroller says every entity registered with the SOS must satisfy all state tax filing requirements before it can terminate. Its listed steps are:

1. File all outstanding annual Franchise Tax and Public/Ownership Information Reports.
2. File any required Final Franchise Tax Report, covering accounting data from the day after the last annual report period through a date within 60 days of the termination date.
3. Pay any tax, penalty and interest due.
4. File, pay and close all other tax accounts with the Comptroller, such as a sales tax permit.
5. Request the certificate of account status online through Webfile, or with Form 05-359.

Steps 1 to 4 must be done before step 5. The Comptroller says the certificate is valid through December 31 of the year it is issued.

The certificate that gets rejected most

The SOS lists the most common problems with this attachment: the wrong certificate, or one whose effective date has expired. The certificate must be valid through the effective date of the certificate of termination. A printout of the Comptroller's Franchise Tax Account Status page is not accepted.

Step 3: File Form 651 with the Secretary of State

Form 651 asks for the following, according to the SOS instructions:

Items 1 to 4: entity information

The LLC's legal name is required. The SOS recommends including the entity type, date of formation and file number to speed up processing.

Item 5: governing persons

The name and address of each governing person. For an LLC, that is each manager if managers run the company, or each managing member if it is member-managed. The filing is a public record, so the SOS suggests a business or post office box address if privacy is a concern.

Item 6: event requiring winding up

Choose the event that triggered the wind-up, usually option A: a voluntary decision to wind up. The SOS will reject a certificate if Item 6 is blank.

Effective date and signature

The certificate takes effect when the SOS files it, or on a delayed date up to 90 days after signing. It does not need to be notarized. Signing a filing you know is materially false is an offense under section 4.008 of the BOC, so read the statements before you sign.

After termination: service of process and reinstatement

On filing, the SOS records show the LLC as "Voluntarily Terminated." The SOS notes that a registered agent generally is not obligated to accept service for a terminated entity unless a contract requires it, but other rules may still let people serve those who ran the company.

If you change your mind, Texas allows reinstatement. Since SB 1514 took effect on September 1, 2023, there is no deadline to reinstate a voluntarily terminated entity, using Form 811. An entity forfeited for unpaid franchise tax can reinstate at any time by filing the missing reports, paying everything due and attaching a tax clearance letter (Form 05-377, requested through Webfile or Form 05-391).

Common questions