There can be many reasons to close a business, like retirement, financial difficulties, or making room for a new venture. Whatever your reason, you want to make sure you avoid trouble by closing your business properly.
By following the proper steps to dissolve your business, you can make a clean break from your old business ties. If you don’t make a clean break, the government might require you to continue making business registration and license payments. Also, creditors and business affiliates might continue to knock on your door for payments, and you could be subject to unnecessary penalties and fines.
If you’re not ready to talk about closing a business because you’re still trying to start a corporation or a limited liability company (LLC), we have you covered. With our Georgia LLC Formation and Georgia Corporation Formation services, you can get the help you need to start your business quickly.
Dissolving a business takes preparation. You have to address what happens with contributions, profits, debts, and outstanding business obligations. You need to make sure you have your affairs in order before you shut a business down. If you don’t plan and prepare for closure now, you’re likely to have a big headache after your business closes. This is a big reason why keeping thorough and detailed LLC and corporate records is so important. Your business records can help you keep track of what needs to be done before you pull the plug. If you follow the procedures your business records outline, you can avoid a lot of liability.
Before you can properly divide money from a closing business, you need to know much the business is worth. You might be able to determine the value of your business on your own. But hiring a professional to determine your business’s value is a great investment that helps you achieve a smooth dissolution. A good first step to valuing your business is to gather all of your operational documents such as contracts and financial statements. The more concrete financial information you have about your business, the better.
You need to know where all of your business documents are and have them in an easily reviewable order. That’s where we step in. Our Worry-Free Compliance Service and dashboard keep your business documents organized so you can easily gather and reference them when significant business events come up.
Before you fully dissolve a Georgia business, you have to handle your debts and obligations to others. In fact, when you file business dissolution paperwork with the state, you usually have to include a statement that you’ve paid, discharged, or made provisions for all of your business debts and obligations. To fulfill these requirements, you have to know who you owe money to and how much you owe them.
Even if you’re closing your business to avoid incurring more debt, you can’t walk away without handling current debts. Outstanding debts don’t normally disappear when a business dissolves. If you let your enterprise close without handling your business debts, you could suffer personal legal ramifications.
When you want to dissolve a Georgia business and that business is registered with the state, there are usually specific documents you have to file to make the dissolution official.
If you want to dissolve a Georgia corporation, you have to handle certain business matters and then file Articles of Dissolution in Georgia. If your corporation issued shares before deciding to dissolve, you also have to file a Notice of Intent to Dissolve and you have to publish it. When you want to dissolve a Georgia LLC., you have to handle certain business matters and then file a Certificate of Termination.
You file Articles of Dissolutions and Certificates of Termination with the Georgia Corporations Division of the Secretary of State. You can file the documents online or by mail.
The first place to look for how to dissolve a business in Georgia is your business’s operating document. This means looking at your bylaws or Articles of Incorporation if you have a corporation, and looking at your operating agreement or Articles of Organization if you have an LLC. Many business owners write their own rules for dissolving a business in their operating documents. If your business doesn’t have rules for dissolving a business in an operating document, you have to follow Georgia law.
If you’re starting an LLC and you want it to have an operating agreement, that’s a great decision. Operating agreements allow you to customize your business operations, manage the expectations of your associates, and make dissolution easier. We can get you started on a solid operating agreement with our operating agreement template. Our template can give you the headstart you need to write your own set of comprehensive business rules.
Remember, regardless of whether or not you write your own business rules in an operating document, you still have to file dissolution paperwork with the state when you’re ready to dissolve your business entity.
To legally run your business, you likely had to have some kind of license, permit, or registration from the federal, state, or local government. Most business licenses, permits, and registrations come with renewal obligations and fees. Properly dissolving your business includes cancelling these features of your business. You also want to make sure that you cancel any automatic renewals of these business features. If you leave loose ends like these untied, you could cost yourself money for a business you no longer operate.
You need to fulfill or close out all of your business’s legal and financial responsibilities before you close out your business. As stated above, to file for a Georgia voluntary dissolution of your business, you have to let the Secretary of State know that you’ve properly handled all of your debts and obligations. You also have to let the Secretary of State know that there are no pending legal actions against your business, or that you’ve made adequate provisions regarding any judgments or orders against your business. These statements go in your Articles of Dissolution or Certificate of Termination. Georgia law also requires you to be up to date on your registration requirements before you can file dissolution documents.
Don’t forget that your final obligations might include paying your employees and filing final state and federal tax returns. If you run your business as a corporation, you need to file IRS Form 966 to dissolve your corporation. And if you had an Employer Identification Number (EIN), you need to cancel it.
Once you have your affairs in order, it’s time to file your Articles of Dissolution or a Certificate of Termination to end your corporation or LLC. Getting your affairs in order to dissolve your business can be a complicated process. We recommend reaching out to legal and financial professionals if you have questions about your liabilities.
You might be anxious to close the doors of your business, or you might be dreading your last day. Either way, you have to be organized and prepared. With our Worry-Free Compliance Service, we can help you prepare for the closure of your business. Using Worry-Free Compliance and our dashboard, you can get help keeping your business documents organized and ready for discharging your final business obligations. Our services can also help keep your business up to date and compliant with state law, so you’re in the right position to properly dissolve your business.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Generally, you have to get proper approval to dissolve your business from your owners and managers. After you have proper approval, you need to handle your outstanding business obligations and legal liabilities. Once you’ve handled your obligations and liabilities, you file dissolution paperwork with the Secretary of State.
It’s free to file Articles of Dissolution or a Certificate of Termination online. But you must pay a $10 service charge if you file your documents by mail.
The Secretary of State normally returns a Certificate of Dissolution within three business days of filing corporate Articles of Dissolution. It can take two to eight business days to process a Certificate of Termination for an LLC.
After receiving proper approval to dissolve, developing a plan of dissolution, and handling debts, legal matters, and other obligations, a nonprofit corporation dissolves by filing a Notice of Intent to Dissolve and Articles of Dissolution. Nonprofit corporations also need to publish their Notice of Intent to Dissolve.
Georgia Business Resources
Business Dissolution by State