Certificate of Cancellation
A Delaware filing that voluntarily ends an LLC's legal existence.
Definition
A Certificate of Cancellation is filed under 6 Del. C. § 18-203 to voluntarily dissolve a Delaware LLC. Cancellation is the final step in voluntary wind-down. State fee: $200. After Cancellation, the LLC no longer owes annual franchise tax.
Context
Without filing Cancellation, the LLC continues to owe the $300 annual franchise tax indefinitely, leading to eventual state-level cancellation after 2 years of non-payment.
Example
An LLC owner winds down operations. After settling all obligations and final tax filings, they file a Certificate of Cancellation with Delaware to formally end the entity.
Common pitfalls
- Filing Cancellation before settling debts can create personal liability for known obligations.
- State-level cancellation (for non-payment) differs from voluntary cancellation.
- Final-year tax filings (Form 5472 + pro forma 1120) still required.