What can lead to the dissolution of an LLC?

What can lead to the dissolution of an LLC?

• A. Approval from its members
• B. Filing a tax return
• C. Payment of members' salaries
• D. Limited liability from owner debts

Answer: (A)

The dissolution of a Limited Liability Company (LLC) can occur through the approval of its members. Members of an LLC have the autonomy to decide on the continuation or dissolution of the company based on the operating agreement or state law. This means that if the majority (or the percentage specified in the operating agreement) of the members agree to dissolve the LLC, this decision will take effect, leading to the cessation of the LLC’s existence. Filing a tax return is a requirement for compliance and does not inherently lead to dissolution; it is part of maintaining the business's legal standing. Payment of members' salaries is a part of normal operations and financial management, and does not influence the decision to dissolve the LLC. Limited liability protects members from personal liability for the debts of the LLC, but it does not pertain to the process of dissolving the business. Therefore, the correct choice relates directly to the members' decision-making power in the dissolution process.

The dissolution of a Limited Liability Company (LLC) can occur through the approval of its members. Members of an LLC have the autonomy to decide on the continuation or dissolution of the company based on the operating agreement or state law. This means that if the majority (or the percentage specified in the operating agreement) of the members agree to dissolve the LLC, this decision will take effect, leading to the cessation of the LLC’s existence.

Filing a tax return is a requirement for compliance and does not inherently lead to dissolution; it is part of maintaining the business's legal standing. Payment of members' salaries is a part of normal operations and financial management, and does not influence the decision to dissolve the LLC. Limited liability protects members from personal liability for the debts of the LLC, but it does not pertain to the process of dissolving the business. Therefore, the correct choice relates directly to the members' decision-making power in the dissolution process.