# US LLC & Corporation Dissolution

> Dissolving a US company means paying any outstanding state taxes and reports, filing a certificate of dissolution or cancellation with the state, filing final federal returns (marked final, with Form 5472 for foreign-owned entities), closing the bank account and asking the IRS to close the EIN account. Simply abandoning the entity leaves penalties accruing for missed state taxes and IRS filings.

Practice: US Accounting, Payroll & Sales Tax — https://www.industax.com/services/us-accounting-compliance/

States typically require all franchise taxes and annual reports to be current before accepting a dissolution. For foreign-owned LLCs, the final-year Form 5472 is often forgotten, which can trigger the $25,000 penalty after closure.

We clear arrears, file the dissolution, prepare final returns and close the EIN account, and handle the Indian side — reporting the disinvestment under FEMA.

## Key facts

| Item | Detail |
| --- | --- |
| State | Arrears cleared; certificate of dissolution/cancellation |
| Federal | Final returns marked final; Form 5472 if foreign-owned |
| EIN | Account closed by letter to the IRS |
| India | Disinvestment reported under ODI rules |

## Who needs this

- Founders closing inactive US LLCs
- Companies restructuring out of the US
- Owners with lapsed entities accruing penalties

## What's included

- Arrears clearance
- Dissolution filing
- Final returns
- EIN and FEMA closure

## Documents

- Entity documents and EIN
- Bank statements
- Prior returns

## Process

1. **Clear** — State and federal arrears filed.
2. **Dissolve** — State filing accepted.
3. **Close** — Final returns, bank, EIN and FEMA.

## FAQs

### Can I just stop paying the state fees?

The state will eventually dissolve the entity administratively, but penalties and unfiled federal returns remain your problem. A formal dissolution is cleaner.

### Do I file Form 5472 in the year of closing?

Yes, for the final year, if the LLC was foreign-owned and had reportable transactions such as distributions to the owner.

### Does closing the US entity need Indian reporting?

Yes. Disinvestment from an overseas entity must be reported through the AD bank within the prescribed time.

## Official sources

- IRS — Internal Revenue Service: https://www.irs.gov/

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Canonical page: https://www.industax.com/services/us-accounting-compliance/us-company-dissolution
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.