Voluntary LLC Dissolution and Cancellation Requirements in Arizona
At a glance
| Governing law and scope | Arizona Limited Liability Company Act, A.R.S. Title 29, ch. 7; ordinary domestic LLC dissolution, winding-up notice, claims, and termination filed with Corporation Commission (§§ 29-3701 to -3707) |
|---|---|
| Dissolution event and approval | Articles/operating-agreement event or agreement-set member threshold; default is majority in interest plus member(s) entitled to >50% of liquidation value. No-member period is 180 days unless timely cured (§ 29-3701; § 29-3102(12)) |
| Pre-filing status and tax clearance | Termination waits until all known property/assets are applied and distributed. No tax-clearance, good-standing, annual-report, or final-return attachment appears in § 29-3702(H) or Form L031; LLCs file no annual reports (ACC instructions/FAQ) |
| Winding-up authority and powers | Existing member/manager structure continues; if no members, last member or legal representative may act, then transferees holding >50% of liquidation value may appoint. Discharge liabilities, close, preserve briefly, litigate, transfer, settle, and distribute (§§ 29-3407(E), 29-3702) |
| Creditor notice and claims | Optional known-claim notice: ≥120 days to submit and 90 days to sue after rejection. After filing Notice of Winding Up, optional Commission filing + newspaper publication creates a 3-year bar measured from the later event; court-set security covers contingent/unknown/future claims (§§ 29-3704 to -3706) |
| Debts, reserves, and distributions | Creditors, including member-creditors, first; then unreturned contributions and residual distribution shares. Solvency limits apply; surviving claims can reach capped post-dissolution distributions, and improper-distribution actions have a 3-year limit (§§ 29-3405, -3406, 29-3705(D), 29-3707) |
| Termination filing and signer | Optional Notice of Winding Up may precede mandatory Articles of Termination after known assets are applied/distributed. Termination states LLC name and that certification; an authorized individual or entity signs under penalty of law (§§ 29-3206, 29-3702; Forms L035/L031) |
| Fee, method, and effective date | $35 termination; online, mail, or fax. Optional winding-up notice is $10; expedite adds $35. A custom record may specify a later effective time/date up to 90 days, though Form L031 has no delayed-date field (§§ 29-3207, -3213; ACC fee schedule/FAQ) |
| Survival, revocation, and post-closure | Before termination takes effect, unanimous members—or all transferees if memberless—may rescind and withdraw/correct a winding-up notice. After termination, existence continues only for suits, omitted property, unpaid claims, and necessary wrap-up; voluntary termination cannot be reinstated (§§ 29-3702(I), -3703; ACC FAQ) |
Requirements one by one
The operating agreement can set the approval threshold
Under § 29-3701, an event in the articles or operating agreement can cause dissolution. The operating agreement can also specify how many members must sign the dissolution consent.
If it does not, Arizona's default has two parts: a majority in interest of the members must sign, and the signers must include one or more members entitled to receive more than half of the liquidation value. Section 29-3102(12) defines a majority in interest by profit interests, measured through rights to residual distributions after contributions are repaid under § 29-3102(12).
Existing management rules continue during winding up
Under § 29-3407, dissolution does not end the Act's management rules. A member-managed LLC remains managed by its members; a manager-managed LLC remains managed by its managers, subject to the wrongful-dissolution limitation.
If no members remain, § 29-3702 allows the last member or that person's legal representative to act as liquidating agent. If neither acts within a reasonable time, transferees entitled to more than half of the liquidation value may appoint one.
The LLC must discharge its debts and other liabilities, close its affairs, and marshal and distribute assets. It may preserve the going concern briefly, litigate, transfer property, settle disputes, and take other necessary steps.
The Notice of Winding Up is optional but useful
Section 29-3702 allows, but does not require, a Notice of Winding Up. Form L035 states that winding up has commenced and carries a $10 regular-processing fee.
The filing matters if the LLC wants the broader claims procedure under § 29-3705. That procedure is unavailable until the notice of winding up has been filed.
Known claims use 120-day and 90-day periods
Under § 29-3704, any dissolved LLC may give a known claimant written notice. The submission deadline must be at least 120 days after the claimant receives the notice. If the LLC rejects a timely claim in the required record, the claimant has 90 days after receiving the rejection to sue.
That direct-notice route does not cover contingent claims or claims based on an event after dissolution.
Public notice creates a three-year outside period
After filing a Notice of Winding Up, the LLC may file a claimant notice with the Commission and publish it at least once in the proper county newspaper. Under § 29-3705, the claimant must sue within three years after the later of publication or Commission filing.
The route reaches unnotified claimants, timely claims left unanswered, contingent claims, and claims based on post-dissolution events. A surviving claim can reach undistributed assets or a member's or transferee's proportionate share of the claim or post-dissolution distribution, whichever is less, capped at total assets received.
Court-approved security can protect recipients
An LLC that completed the § 29-3705 filing and publication may ask the superior court to set security for reasonably expected contingent, unknown, and future claims. Under § 29-3706, providing the ordered security satisfies the LLC's obligation for those claims and prevents enforcement against a member or transferee based on liquidation assets received.
Creditors come before contribution return and residual shares
Under § 29-3707, creditors come first, including members who are creditors. The surplus then returns unreturned contributions and finally goes to transferable- interest owners according to their pre-dissolution distribution rights.
The rule in § 29-3405 also prohibits a distribution that would leave the LLC unable to pay debts as they come due or with total assets below total liabilities. A recipient of an excessive distribution can owe the excess back under § 29-3406, and that action must begin within three years after the distribution.
Articles of Termination come after known assets are handled
Under § 29-3702(H), the LLC files Articles of Termination once all known property and assets have been applied and distributed under the Act. The filing states the LLC's name and certifies that condition. Form L031 repeats the certification under penalty of perjury and allows any authorized person to sign.
The filing does not require publication. Neither the statutory contents nor Form L031 asks for a tax-clearance certificate, good-standing certificate, annual report, or final-return statement. The Commission separately confirms that Arizona LLCs do not file annual reports.
Termination costs $35 and may use a custom delayed date
Under § 29-3213 and the Commission's March 2026 fee schedule, the regular Articles of Termination fee at $35. Expedited processing adds $35; optional two-hour, same-day, and next-day services have separate charges.
The Commission accepts online, mailed, and faxed submissions. Under § 29-3207, a filed record can specify a later effective time or a delayed date and time up to 90 days after delivery. Form L031 has no delayed-date field, but § 29-3206 says use of the Commission form is not required, so a compliant custom record may use the statutory option.
Rescission ends when termination takes effect
Under § 29-3703, every member must approve rescission, or all transferees must approve if the LLC has no members. An unfiled-effective Notice of Winding Up is withdrawn; an effective one is corrected to state that dissolution and winding up were rescinded. The LLC then resumes as if dissolution never occurred.
Once Articles of Termination become effective, rescission is unavailable. The Commission also states that a voluntarily terminated LLC cannot be reinstated.
What trips people up
Arizona's two filings do different jobs. The optional Notice of Winding Up can be filed when winding up begins and is the gateway to the public three-year claims route. Articles of Termination wait until all known property and assets have been applied and distributed.
Termination is final for ordinary reinstatement, but it does not erase every legal function. Section 29-3702(I) continues the LLC only for suits, omitted property, unpaid claims, and other reasonably necessary wrap-up actions.
The default dissolution vote is not simply “a majority.” It combines majority- in-interest approval with a separate liquidation-value requirement unless the operating agreement supplies its own member threshold.
Common questions
Must the LLC file a Notice of Winding Up?
No. It is optional. Filing it is necessary, however, before using § 29-3705's filed-and-published three-year claims procedure.
Must the LLC publish its Articles of Termination?
No. The Commission's termination instructions expressly say publication is not required. Publication belongs to the optional claims process, not termination.
Can the LLC terminate before distributing known assets?
No. The Articles of Termination certify that all known property and assets have already been applied and distributed under the Act.
Can a voluntarily terminated LLC be reinstated?
No. Rescission is available only before the Articles of Termination become effective. After voluntary termination, the Commission directs filers to form a new entity if they want to resume business.
Statutes and sources
- A.R.S. §§ 29-3102, 29-3701, and 29-3703 — approval, majority-in-interest definition, and rescission. Arizona Legislature, accessed July 28, 2026.
- A.R.S. §§ 29-3702 and 29-3704 to -3707 — winding up, termination, claims, security, and asset order. Arizona Legislature, accessed July 28, 2026.
- A.R.S. §§ 29-3206, 29-3207, 29-3213, and 29-3405 to -3407 — filing mechanics, timing, fees, distributions, and management. Arizona Legislature, accessed July 28, 2026.
- Arizona Corporation Commission, Form L031 instructions, Form L035, and March 2026 LLC fee schedule, accessed July 28, 2026.
Source links
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