LLC Dissolution and Winding-Up Kit

DOCUMENT 1

WRITTEN CONSENT OF THE MEMBERS TO DISSOLVE

AND PLAN OF WINDING UP

[COMPANY NAME], LLC

The undersigned, being [all of the Members OR Members holding more than two-thirds of the interests in the profits of the Company, or such other proportion as the Operating Agreement requires] of [COMPANY NAME], LLC (the "Company"), acting by written consent without a meeting as the Operating Agreement and the Act permit, adopt the following resolutions.

RESOLVED, that the Company is dissolved effective [DISSOLUTION DATE] (the "Dissolution Date") as Article 19.47 of the Act and the Operating Agreement provide, and that from the Dissolution Date the Company carries on no business except what is needed to wind up its affairs.

RESOLVED, that [LIQUIDATOR NAME], [TYPE "the Company's Manager" OR "a Member" OR "a person appointed by the Members"], is appointed to wind up the Company's affairs (the "Liquidator") as Article 19.49 of the Act and the Operating Agreement contemplate, with full authority to act for the Company in everything described in the Plan of Winding Up below, and that the Liquidator is paid [LIQUIDATOR COMPENSATION, OR "nothing"] for the work of winding up, in addition to reimbursement of reasonable expenses.

RESOLVED, that the Liquidator carry out the following plan:

• Give written notice of the dissolution to every known creditor of the Company and to every person with a pending claim against it, using Document 2 of this kit, and give every other notice the law requires.

• Collect everything the Company is owed, including accounts receivable and any unpaid capital contributions the Operating Agreement makes payable on dissolution, and complete or terminate the Company's contracts on the best terms reasonably available.

• Sell or otherwise dispose of the Company's assets, other than assets the Members agree in writing to distribute in kind, for the best price reasonably obtainable, and in doing so execute any deed, bill of sale, assignment or other instrument in the Company's name.

• Pay, or make reasonable provision for, every debt and liability of the Company, including taxes, in the order Article 19.50 of the Act requires — creditors first, including Members who are creditors other than for distributions — and set aside a reserve of not less than $[CONTINGENCY RESERVE AMOUNT] for claims that are contingent, conditional, unmatured or not yet known, to be held for [RESERVE PERIOD IN MONTHS] months after the final distribution and then distributed to the Members.

• File the Company's final income tax returns and informative returns with the Puerto Rico Department of the Treasury (Departamento de Hacienda) and the Internal Revenue Service; cancel the Company's merchant's registration, municipal license, employer accounts and other registrations; and close the Company's bank accounts once the final distribution has been made.

• After every debt has been paid or provided for, distribute the remaining assets to the Members — first the amounts, if any, owed to Members and former Members as distributions declared but unpaid, then the return of their capital contributions, and then the balance in proportion to their shares of profits — or in whatever other order the Operating Agreement provides, as Article 19.50 of the Act permits; and obtain each Member's signature on Document 4 of this kit before making the final payment.

• Deliver the Company's books and records to [RECORDS CUSTODIAN NAME], who will keep them for not less than [RECORDS RETENTION YEARS] years after the certificate of cancellation is filed.

• When the winding up is complete, sign and file the certificate of cancellation of the Certificate of Organization with the Department of State of Puerto Rico, pay any outstanding annual fee, and give each Member a copy of the filed certificate.

RESOLVED, that the Liquidator is authorized to sign every document and take every action reasonably necessary to carry out these resolutions, including retaining accountants, attorneys and brokers at the Company's expense, and that the Liquidator is entitled to the protection from liability and the indemnification the Operating Agreement and the Act give to a person who acts in good faith on the Company's behalf.

Signed by the undersigned Members on the dates written beside their signatures and filed with the Company's records. If the Operating Agreement requires less than unanimous consent, the Liquidator will promptly give a copy of this consent to every Member who did not sign it.

______________________________
[MEMBER 1 NAME], Member — [MEMBER 1 PERCENTAGE]% of profits

______________________________
[MEMBER 2 NAME, OR DELETE], Member — [MEMBER 2 PERCENTAGE]% of profits

______________________________
[MEMBER 3 NAME, OR DELETE], Member — [MEMBER 3 PERCENTAGE]% of profits

Accepted by the Liquidator:

______________________________
[LIQUIDATOR NAME], Liquidator

INSTRUCTION SHEET

LLC Dissolution and Winding-Up Kit

An LLC that simply stops operating does not cease to exist. It keeps owing the annual fee to the Department of State, keeps having to file tax returns, keeps its registrations alive, and its owners keep a company that can be sued. Closing it properly — "dissolving" it and "winding up" its affairs — ends those obligations and gives the members a defensible record that the company's debts were paid before they took what was left. The process has three stages, and the kit has a document for each:

Document 5 is for the uncommon case in which the members change their minds after signing Document 1 and before the certificate of cancellation is filed.

Use this kit if: the company is a Puerto Rico LLC that is solvent — its assets are enough to pay its debts — and the members agree to close it, or the members holding the required interest agree.

Do not use this kit alone if: the company cannot pay its debts (see Section 5); a member objects or cannot be found; the company is in a lawsuit; or a court has ordered dissolution.

• Work in Microsoft Word (or any program that opens .docx files). Every field appears in yellow highlight inside square brackets, for example [COMPANY NAME]. Replace the whole bracket — including the brackets themselves — with your information, and remove the yellow highlight (select the text, then Home → Text Highlight Color → No Color).