A Limited Liability Company (or LLC) is a legal business entity having features similar to corporations and smaller partnerships.
Starting your business was a matter that needed to meet the consideration of the law and registration with Georgia’s Secretary of State. So, naturally, folding up shop and ending your business is also a legal matter and needs to be handled with absolute care. Failure to properly dissolve an LLC could result in tax liabilities and legal issues.
But where do you start?
What is a Statement of Winding Up?
It is important to follow the steps for dissolution laid out in your LLC’s operating agreement. These will normally detail everything that needs to be done, including who needs to be notified and in what order. But to start things off, typically, the state of Georgia asks that the owners of the business hold a vote to dissolve. If the motion has the necessary votes, a formal date of dissolution should be decided.
Georgia allows business owners to file a ‘statement of winding up’ with the Secretary of State’s office. This document notifies the state of the business owner’s intent to dissolve and that it is initiating the process to legally begin this process.
The statement of winding up does not end the business, however. It only starts the ball rolling.
Who Needs to Be Notified?
When it is time to move on from a business, it is important to notify not only the state but also all creditors, investors, stakeholders, and claimants.
This step may not be required, but it is recommended for those who wish to avoid financial and legal liability in the process of dissolving their LLC.
What Accounts Need to Be Closed?
Every business in Georgia has multiple tax accounts, all monitored and maintained by different parts of the state government. Before the LLC can be dissolved, all tax accounts must be closed, with all debts and fines paid.
Sales taxes, unemployment, and employee withholding taxes must all be paid. The state must be satisfied with the status of your accounts before your business is allowed to expire.
When to File Articles of Dissolution?
Articles of dissolution, known as the ‘certificate of termination’ in the state of Georgia, can be filed by business owners looking to voluntarily dissolve their LLC. When all is said and done, the filing of this document makes the dissolution of your business in Georgia complete. Please note, however, that if your business operates in other states you will need to file other articles of dissolution with their respective Secretary of State.
If you walk away from your LLC without filing all necessary paperwork and properly closing all accounts, the state can find you, and you could face legal trouble. Just as you tried to run your business with the best intentions, you must ensure that, when it comes time to dissolve your LLC, you attempt to do your best for everyone involved with that business as you close the door.