The method for discontinuing a business in Georgia depends upon how it is legally organized. A sole proprietorship or partnership has no state-mandated formal requirements to close down shop. It simply has to pay outstanding debts and terminate accounts. Conversely, limited liability companies and corporations have dissolution procedures that are outlined by state law. Failure to follow the law when winding up business affairs for those entity types leaves members and shareholders personally liable for claims that may arise after business operations have ceased.
Establish an agreement to close the business. Partners in a partnership must agree to close the business in accordance with the partnership agreement that is in effect. LLCs and corporations must obtain a majority vote of members or shareholders to dissolve the business. Follow the procedures specified in the LLC's membership agreement or the corporation's bylaws to hold the vote. If controlling documents do not exist, a simple majority vote on the issue by owners with voting interests will suffice.
Wind up the business affairs for sole proprietorships and partnerships. Pay all creditors, finalize any outstanding obligations and close accounts. Pay particular attention to finalizing or closing Georgia state, city and local government obligations, such as those for sales tax and canceling permits and licenses.
Bring state filings and registrations up to date for LLCs and corporations. Georgia does not allow a business to file closing paperwork unless it is in good standing. Go to the corporations division section of the website for the secretary of state. Search for your business in the business entity database. The record will indicate if any state filings are delinquent, such as the annual report. Rectify any delinquency.
Pay all known outstanding debts for LLCs and corporations. Set aside money for any obligation that may mature after the date the business is closed. Provide written notice to creditors that if a claim is not presented in a timely fashion, it will be barred after you file state paperwork. Close all vendor, tax and financial accounts.
Distribute all remaining assets to owners of LLCs and corporations in proportion to their ownership interest. Make this distribution only after all debts have been paid and money set aside for contingent obligations. If a claim is made subsequent to the dissolution of the business, the owners are only liable to the extent of this distribution, provided the business was closed down according to the provisions of state law.
File a certificate of termination with the Georgia secretary of state's office to dissolve an LLC. Download a sample certificate from the state's website. The certificate requires the name of the LLC, a statement that all obligations have been paid and no lawsuits are pending, an effective date and the signature of an authorized party. File the certificate by mail to the address listed in the instructions. There is no fee to file this certificate. The dissolution of the business becomes effective as of the date the state accepts the filing.
File a notice of intent to dissolve a corporation with the secretary of state. Download a template from the state website. The notice requires the name of the corporation, the date the dissolution was authorized along with a statement that the shareholders approved it and a statement that notice of dissolution will be published in a local paper. Mail the notice to the state in accordance with the instructions included with the template. There is no fee to file this form.
Publish notice of intent to dissolve your corporation in a local newspaper within one business day of mailing the notice to the state. Check with the Georgia Office of the County Clerk for acceptable publications. Pay the fee to publish.
File articles of dissolution for a corporation with the secretary of state. Download a template from the corporations section of the state's website. The articles require the name of the corporation, the date the notice of intent was filed and that it has not been revoked, a statement that all obligations have been paid, money set aside if needed for contingencies and remaining assets distributed to shareholders, and that there are no outstanding lawsuits against the business. The document must be signed by an authorized representative and filed in duplicate by mail to the address listed in the instructions. There is no filing fee. The effective date of dissolution is the date the filing is accepted by the state.
Terry Masters has been writing for law firms, corporations and nonprofit organizations since 1995. Her online articles specialize in legal, business and finance topics. She holds a Juris Doctor and a Bachelor of Science in business administration with a minor in finance.