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If you and your business partners agree to dissolve your business, there are several steps that are recommended many of which an experienced attorney can assist you with when you seek to terminate your business relationship.

Consulting Your Organizational Documents

If your business is an LLC, a partnership with a written Partnership Agreement or a corporation, you will need to follow the required steps upon dissolution (such as voting requirements) contained in your organizational docs. These documents may consist of Partnership Agreements (Partnerships), Articles of Incorporation or By-Laws (Corporations) or Articles of Organization (LLCs), depending on the type of company you are dissolving.

Filing a Notice of Intent to Dissolve and Articles of Dissolution

Each state has its own laws that address the procedures for business dissolution, which is why it is crucial to hire a local attorney. For example, in Georgia, corporations that have not issued shares or have not commenced business may dissolve by filing their Articles of Dissolution. However, a corporation that has issued shares and commenced business must first file a Notice of Intent to Dissolve and publish the notice of dissolution in a newspaper of general circulation in the county where the corporation’s registered office is located. After publication, these corporations may file their Articles of Dissolution with the Secretary of State.

Georgia LLCs may begin the process by submitting a Letter of Termination to the Secretary of State’s office. A certificate of termination must include the following: name of the LLC; all known debts, liabilities and obligations of the LLC have been paid or discharged; and that there are no actions pending against the LLC in any court or that adequate steps have been taken for the satisfaction of any judgment that may be entered against it in any pending action.

“Winding Up” a Business

Winding up is the process of taking inventory of all business assets, notifying creditors and collecting all monies owed to the business, discharging liabilities and distributing the remaining property to stakeholders. Regardless of the type of business entity, businesses have an obligation to inform creditors of a forthcoming closing. You will need to inform lenders, insurers, suppliers, vendors, service providers, etc. to terminate those agreements and determine how much you owe them upon dissolution. After you’ve settled with your creditors, an experienced lawyer can help you distribute what is left of the business assets as provided in the business’s organizational documents.

Notifying Tax and License Authorities in Georgia

In addition to reporting to local, state and federal tax agencies, you will need to file additional paperwork with your local agencies to terminate any business licenses and permits. Consult a knowledgeable business attorney at Potter Law or contact the tax agency or licensing agency and inquire about what steps are required upon dissolution.

Terminating or Withdrawing Foreign Registrations

If your company has a foreign registration with another state, you must notify that state of the dissolution. Depending on the state, the form may be called a termination of registration, certificate of termination of existence, application of withdrawal or certificate of surrender of right to transact business.

Call a Georgia Business Attorney Today

If you have any questions on how to discontinue your company, please call us at Potter Law. We are happy to help!