Maryland LLC Dissolution Law

Limited Liability Company – General – Maryland

Related Maryland Legal Forms

In Maryland a corporation may be dissolved either voluntarily or involuntarily. THIS SUMMARY ADDRESSES ONLY VOLUNTARY DISSOLUTION.

The MARYLAND CODE describes the dissolution of a limited liability company as a change in the relationship between the members and not the winding up or the termination of the limited liability company.

On dissolution, the limited liability company is not terminated but continues until terminated in accordance with the statutory provisions.

A limited liability company is dissolved and shall commence the winding up of its affairs on the first to occur of the following:

(1) At the time or on the happening of the events specified in the articles of organization or the operating agreement;
(2) At the time specified by the unanimous consent of the members;
(3) At the time of the entry of a decree of judicial dissolution under § 4A-903; or
(4) Except as otherwise provided in the operating agreement, at the time the limited liability company has had no members for a period of 90 consecutive days.

Unless otherwise provided in the articles of organization or the operating agreement, the remaining members of a limited liability company may wind up the affairs of the limited liability company.

Following dissolution, a member of a limited liability company can bind the limited liability company:

(1) By any act appropriate for winding up the affairs of the limited liability company or completing transactions unfinished at the time of dissolution, unless the member purporting to act on behalf of the limited liability company does not have the authority to do so and the person with whom the member is dealing has actual knowledge or actual notice of the absence of authority; and
(2) In any transaction which would have been binding on the limited liability company had it not been dissolved; provided, however, that the person with whom the member is dealing does not have actual knowledge or actual notice of the dissolution.

On the winding up and termination of a limited liability company, the assets must be distributed as follows:

(1) To creditors, including members who are creditors, to the extent permitted by law, in satisfaction of the liabilities of the limited liability company; and
(2) Unless otherwise provided by the operating agreement, to the members in proportion to their respective capital interests, after the capital interests are adjusted by:

(i) Adding to the members’ capital interests their respective shares of the profits of the limited liability company; and
(ii) Deducting from the members’ capital interests their respective shares of the losses of the limited liability company and all distributions previously received by the members.

The remaining members of a limited liability company may cause articles of dissolution to be filed with the State Department of Assessments and Taxation at any time after dissolution and before termination. Articles of dissolution must contain:

1. The name of the limited liability company;
2. The date of filing of the articles of organization and each amendment thereto;
3. The date of the dissolution; and
4. Any other information the members determine.

A limited liability company is terminated on the later of:

(1) The date on which the State Department of Assessments and Taxation accepts for record the articles of cancellation filed pursuant to § 4A-909 of this subtitle; or
(2) The effective date of the articles of cancellation. Notwithstanding the filing of articles of cancellation, the limited liability company continues to exist for the purpose of paying, satisfying, and discharging any existing debts or obligations, collecting and distributing its assets, and doing all other acts required to liquidate and wind up its business and affairs.

Articles of cancellation must set forth:

(1) The name of the limited liability company and the address of its principal office;
(2) The name and address of a resident agent of the limited liability company who shall serve for one year after termination;
(3) The name and address of each member who was designated to wind up the affairs of the limited liability company or if no member was so designated, the names and addresses of all members;
(4) A statement that the limited liability company is terminated effective upon the filing of the certificate of cancellation or on a date specified therein which is no later than 30 days after the filing of the certificate;
(5) A statement that notice of the termination was sent by registered mail, postage prepaid, return receipt requested to all known creditors of the limited liability company and the date of the mailing, or a statement that the limited liability company has no known creditors; and
(6) Any other provisions that the limited liability company considers necessary.

A limited liability company must file articles of cancellation for record with the State Department of Assessments and Taxation:

(1) If there are known creditors of the limited liability company, after 19 days following the sending of the required statutory notice; or
(2) If there are no known creditors, at any time. The forfeiture of the right to do business in Maryland and the right to the use of the name of a limited liability company does not impair the validity of a contract or act of the limited liability company entered into or done either before or after the forfeiture, or prevent the limited liability company from defending any action, suit, or proceeding in a court of Maryland.

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Inside Maryland LLC Dissolution Law