How to dissolve a Delaware LLC: Certificate of Cancellation and costs

Delaware LLCs have a reputation for being cheap to keep: no annual report, just a flat annual tax. That simplicity has a flip side when you want to close one. The tax keeps running until the state files your cancellation, and the state refuses to file it while any tax is unpaid. Owners who let the tax on a Delaware LLC go unpaid for a few years are often surprised by the final bill.

This guide covers a Delaware LLC with a single owner living outside the United States. It follows the order that avoids surprises: settle the state tax, wind up the company, file the cancellation, then close the federal side. At each step, you will see what you can do yourself and what LLC Place can handle for you.

Dissolution and cancellation: two words, one closure

Under the Delaware Limited Liability Company Act, an LLC first dissolves, which is the decision to stop doing business and wind up, then cancels its Certificate of Formation, which is the filing that ends its existence. For a single-member company, both happen almost at once: the member decides to dissolve, the company is wound up, and the Certificate of Cancellation is filed under Section 18-203 of the Act.

None of this reaches the IRS. The federal file is closed separately, with a final return and a letter asking the IRS to deactivate the company's EIN account.

Step 1: pay every annual tax, including this year's

Every Delaware LLC owes an annual tax, due on or before June 1. For years it was $300. House Bill 400, signed in May 2026, raises it to $400 starting with the 2026 tax year, so the first $400 payment is due by June 1, 2027. A late payment adds a $200 penalty plus interest of 1.5% per month on both the tax and the penalty.

Before it files a Certificate of Cancellation, the Division of Corporations requires every tax due to the state through the effective date of the cancellation to be paid. It asks owners to contact its Franchise Tax section before filing to confirm the amount. In practice that means paying any arrears with their penalties, and possibly the tax for the year you are closing in.

If the tax goes unpaid for three years, Delaware cancels the company on its own, under the status “Cancelled, Failure to Pay Tax.” That neither wipes out the debt nor closes anything with the IRS.

Step 2: wind up the company's affairs

Settle what the company owes and collect what it is owed. Cancel the subscriptions billed to the company, finish or hand over client contracts, pay the last invoices and transfer the remaining balance to your personal account as a final distribution. Keep the bank statements for the final year, the last invoices and a short written consent in which you, as the member, record the decision to dissolve and its date.

That consent is also what a bank or payment processor may ask for when you close the company's accounts, so it is worth signing it before anything else.

Step 3: file the Certificate of Cancellation

The Certificate of Cancellation fits on one page. It states the company's exact name as it appears in the state's records and the date its Certificate of Formation was filed, and it is signed by an authorized person whose name is printed or typed under the signature. The Division of Corporations publishes a template and asks for a cover letter with your contact details.

The filing fee is $220 under the fee schedule in force since August 1, 2026, plus $50 for a certified copy if you want one. Checks are made out to the Delaware Secretary of State. Expedited handling costs extra: $100 for 24 hours, $200 for same-day, $500 for two hours and $1,000 for one hour.

Filings with the Division of Corporations usually go through the company's registered agent, which submits the certificate and pays the fees. For an owner abroad it is by far the simplest route, since it avoids sending a US check from overseas. LLC Place does exactly that: we prepare the certificate, settle the tax and the fee from the United States, and all you do is sign.

Step 4: file the final federal return

A Delaware LLC owned by a single foreign person is a disregarded entity for income tax purposes, yet it still files every year: a pro forma Form 1120 with Form 5472 attached, which reports the transactions between the company and its owner. For the year the company closes, you file one last time by the usual deadline and check the final return box on the Form 1120.

If some earlier years were never filed, now is the time. Our Form 5472 guide explains the return, and the penalty for a missing form starts at $25,000, which is why it pays to catch up before the IRS writes to you rather than after. With LLC Place, the final return is included in the dissolution, and we can file the missing years in the same process.

Step 5: close the EIN account and the remaining accounts

The IRS does not cancel an EIN; it deactivates the account once the last return is filed. You ask for it by letter, with the company's legal name, EIN, address and the reason for closing, plus a copy of the EIN assignment notice if you have it. Our guide on how to close an EIN with the IRS includes the addresses and a template, and LLC Place sends the letter for you when we handle the closure.

Once the last payments have cleared, close the business bank account, the payment processor and the services billed to the company. Keep the registered agent until the certificate is filed and you have the stamped copy, since the state sends its correspondence there.

What it costs to dissolve a Delaware LLC

The contrast with Wyoming is striking. There, closing costs $60 plus an up-to-date annual report. In Delaware, a company whose tax has gone unpaid for two or three years can easily cost well over a thousand dollars to cancel, most of it back taxes and penalties. If you are still choosing a state, our comparison of Wyoming, Delaware and New Mexico covers these running costs.

What happens if you just stop paying

A Delaware LLC whose tax goes unpaid does not disappear quietly. Each year adds a new tax, a $200 penalty and monthly interest, and after three years the state cancels the company for failure to pay tax. The debt remains, the EIN account stays open, and the IRS still expects a Form 5472 for every year with transactions between the company and its owner.

Our article on closing a US LLC explains why abandoning a company costs more than closing it, and when keeping it dormant can be the better choice.

How LLC Place handles the dissolution

We get the exact tax balance from the state, settle it, file the Certificate of Cancellation, file the final Form 5472 with its pro forma Form 1120, then send the letter that closes the EIN account. You sign once and receive the stamped certificate along with a copy of every document sent to the IRS. The service starts at €199, with state fees and taxes billed at cost.

Frequently asked questions

How much does it cost to dissolve a Delaware LLC?

The Certificate of Cancellation costs $220, plus every annual tax still owed through the cancellation date. For a company that is up to date, that means the filing fee and possibly the current year's tax. For a company with unpaid years, add $300 or $400 per year, a $200 penalty for each and 1.5% interest per month.

Do I have to pay the Delaware annual tax to close my LLC?

Yes. The Division of Corporations will not file the Certificate of Cancellation until all taxes due through the effective date of the cancellation are paid. Contact the Franchise Tax section first to confirm the amount.

Does a Delaware LLC file an annual report?

No. Unlike corporations, Delaware LLCs do not file an annual report. They only pay the annual tax, due by June 1 each year.

How long does a Delaware cancellation take?

Standard processing depends on the Division's workload. If timing matters, expedited handling guarantees processing within 24 hours, the same day, two hours or one hour, for an extra fee. LLC Place can file with the expedited option you choose.

Does canceling the LLC close my EIN?

No. The state and the IRS are separate. After the final return is filed, you write to the IRS to ask it to deactivate the account. The EIN remains the company's permanent identifier.