LLC Administrative Dissolution and Involuntary Termination in Alabama

At a glance

How Alabama handles dissolution

Ala. Code § 10A-5A-7.01 says an LLC dissolves upon the first of four events: an event in its agreement, consent of all members, absence of a remaining member subject to the section's continuation exceptions, or a court order on a member's application. The section does not make an overdue tax, return, fee, or registered-agent lapse an agency dissolution event. The general winding-up article cannot supply that route for an LLC because § 10A-1-9.01 expressly excludes limited liability companies.

The business privilege tax is a separate obligation. Section 40-14A-22(a) levies an annual tax on covered entities and says liability continues for each year beginning before dissolution or another cessation of existence; § 40-14A-25(a) requires a return for each taxable year subject to the tax. Those provisions do not describe a tax-office notice, cure period, or certificate that dissolves an LLC. A tax delinquency should therefore not be read as an already effective dissolution under § 10A-5A-7.01.

If one of § 10A-5A-7.01's events does dissolve the LLC, § 10A-5A-7.02(a) keeps it in existence only for appropriate winding-up activity; subsection (c) preserves the registered agent's authority. Sections 10A-5A-7.07 and -7.08 give a generally dissolved LLC a member-consent and certificate-of-reinstatement route. They do not create an agency default ground.

What trips people up

A privilege-tax return and the LLC's dissolution status answer different questions. Sections 40-14A-22 and -25 impose the tax and return duties; § 10A-5A-7.01 states what dissolves the LLC. Paying late tax or filing a late return is not described in that dissolution section as an agency cure or reinstatement application.

Common questions

Does a missed privilege-tax return itself dissolve the LLC? Section 40-14A-25 requires the return, while § 10A-5A-7.01 lists the dissolution events and does not include a missed return.

Is the general entity winding-up article an agency dissolution path for LLCs? No. Section 10A-1-9.01 expressly excludes limited liability companies from that article.

Statutes and sources

• Ala. Code § 10A-1-9.01 — “This article does not apply to business corporations, nonprofit corporations, limited liability companies, general partnerships, and limited partnerships.” Official code text (accessed 2026-09-26).
• Ala. Code § 10A-5A-7.01 — “A limited liability company is dissolved and its affairs shall be wound up upon the occurrence of the first of the following events:” Official code text (accessed 2026-09-26).
• Ala. Code § 40-14A-22 — “There is hereby levied an annual privilege tax on every corporation, limited liability entity, and disregarded entity doing business in Alabama, or organized, incorporated, qualified, or registered under the laws of Alabama.” Official code text (accessed 2026-09-26).
• Ala. Code § 40-14A-25 — “Every taxpayer shall file a privilege tax return, which shall include the public record disclosures required by Section 10-2B-16.22, with the department for every taxable year for which it is subject to the tax levied by this article.” Official code text (accessed 2026-09-26).
• Ala. Code § 10A-5A-7.02 — “(a) A dissolved limited liability company continues its existence as a limited liability company but may not carry on any activities and affairs except as is appropriate to wind up and liquidate its activities and affairs, including:” Official code text (accessed 2026-09-26).
• Ala. Code § 10A-5A-7.07 — “A limited liability company that has been dissolved may be reinstated upon compliance with the following conditions:” Official code text (accessed 2026-09-26).
• Ala. Code § 10A-5A-7.08 — “In order to reinstate a limited liability company under this article, a certificate of reinstatement shall be delivered for filing to the Secretary of State which certificate of reinstatement shall have attached thereto a true and complete copy of the limited liability company’s certificate of formation.” Official code text (accessed 2026-09-26).