The end of one venture can clear the path for something new. Whether you're a business owner, nonprofit board member, or the executor of a trust, here's everything you need to know about dissolution in GA so that you can close your business with confidence and ease.
What does business dissolution mean in Georgia?
Business dissolution refers to the termination of a business entity's legal existence. This involves more than simply halting operations. To properly dissolve a business, you also need to settle any outstanding state fees, taxes, or debts, file the proper paperwork, close government-affiliated accounts, and, in some cases, publish news of the closure in a local paper.
There are two ways to dissolve a business in Georgia:
- Voluntary dissolution happens when a business owner chooses to close the business.
- Administrative dissolution happens when the state closes the business due to noncompliance. In other words, the business fails to meet certain requirements set by Georgia law.
If your business is administratively dissolved, you still have the option to correct the compliance error and reinstate your business within five years. Otherwise, you'll still need to close any outstanding debts and obtain tax clearance.
The guides below will walk you through how to voluntarily dissolve your business based on its entity type—limited liability company (LLC), corporation, or nonprofit.
How to dissolve an LLC in Georgia
Here are the main steps to legally dissolve your Georgia LLC with the Secretary of State (SoS).
Step 1: Review your operating agreement
If the limited liability company's articles of organization or operating agreement has dissolution provisions, use that as a guide on how to proceed. It should outline things like member voting procedures, internal protocols for winding down operations, timelines, and how to handle member distributions once the LLC settles any outstanding state fees, taxes, and/or debts.
If there's no operating agreement, Georgia Code provides some default rules for dissolution that you can use as a guide.
Step 2: Obtain member approval
Once you've set up your dissolution plan, call a formal meeting with all of the LLC members to vote on whether or not to terminate the business. Keep thorough meeting minutes and document the result of the vote for your records.
Step 3: Notify creditors and settle any debts
Now you're ready to compile a list of known creditors and claimants that your business may owe. This is an extremely important step to help protect LLC members from potentially becoming personally liable for business debts.
Send a written notice to each creditor about your intent to dissolve the LLC. If claims come in, pay them off. Once bills are fully paid, cancel any lease agreements, vendor contracts, or service subscriptions connected to your business.
Make sure to also file your final, most recent annual registration (Georgia's annual report) and federal tax returns. We'll address how to settle state tax accounts later in the article.
Step 4: Distribute remaining LLC assets to its members
Once the LLC settles its debts, calculate its remaining assets, including cash, tangible property, real estate, and intellectual property. If your operating agreement addresses ownership percentages, distribute the remaining assets according to those shares.
Make sure to create written documentation of all member distributions and keep them in your records. Keep in mind that capital gains from asset distributions can have tax implications. You may want to consult a tax professional, especially if your situation is complex.
Step 5: File a Certificate of Termination
You're finally ready to officially end your LLC's legal existence. To do this, file a Certificate of Termination (Form CD 415) with the Georgia Secretary of State. Here's what you'll need to provide:
- The name of your limited liability company
- Its control number
- A statement affirming that you've settled all business debts and liabilities
- Another statement affirming that the LLC is not currently involved in a lawsuit
- The effective date (if not immediately, it can be up to 90 days after filing)
- The date
- Your signature
- Your relationship to the business (i.e. are you a member, manager, or attorney-in-fact?)
You can file the Certificate of Termination online through eCorp (the SoS' online filing portal), or mail a paper copy with a $10 service charge to the following address:
The Secretary of State
Corporations Division
2 Martin Luther King Jr. Dr. SE
Suite 313 West Tower
Atlanta, Georgia 30334
How do you dissolve a corporation in Georgia?
To officially terminate a domestic profit corporation, you need to file articles of dissolution with the Secretary of State. Once again, this process requires you to first complete a few more steps.
Step 1: Obtain board and shareholder approval
Based on Georgia Business Corporation Code, shareholders with voting rights must approve the dissolution before you can terminate a corporation. This starts with a meeting of the board of directors in which they adopt a resolution to dissolve the business entity.
The board will then recommend dissolution to the shareholders, who decide the outcome through a majority vote, unless the corporation's articles of incorporation or bylaws state otherwise. If shareholders have voting rights, the board of directors must inform each shareholder in advance and explicitly state that they are meeting to determine whether or not to close the business.
Step 2: File a Notice of Intent to Dissolve
If shareholders approve dissolving the corporation, you will need to file a Notice of Intent to Dissolve (Form CD 410) with the Secretary of State. Here's what it should include:
- The name of the corporation
- Its control number
- The date that the board of directors or shareholders authorized dissolution
- A statement affirming that shareholders voted to dissolve the business or that shareholder approval was unnecessary
- The effective date (if not immediately upon filing)
- The date
- Your signature
- Your relationship to the corporation (i.e. officer, Chairperson of the Board, attorney-in-fact)
You can file this notice online through eCorp, or mail a paper copy along with a $10 service charge to the following address:
The Secretary of State
Corporations Division
2 Martin Luther King Jr. Dr. SE
Suite 313 West Tower
Atlanta, Georgia 30334
Keep in mind that you'll need to contact your county's legal newspaper and request for the notice to be published before you can officially sign and file.
Step 3: Publish the Notice of Intent to Dissolve
A county's official legal newspaper is called a Legal Organ. Send the request to the Legal Organ that's in the same county as your registered agent's office. If you don't know it, check out the Georgia Press Association's helpful list of Legal Organs by county. Then, send the following statement along with a $40 publication fee to that organization:
"Notice Of Intent To Voluntarily Dissolve A Corporation
Notice is given that a notice of intent to dissolve (your corporation's name), a Georgia corporation with its registered office at (registered office address), has been delivered to the Secretary of State for filing in accordance with the Georgia Business Corporation Code."
Make sure the notice runs for two consecutive weeks and that you've kept ample proof of the publication in your corporate records.
Step 4: Notify creditors and settle any debts
Compile a list of known creditors and claimants that your business may owe. Again, this is an extremely important step to help protect owners from becoming personally liable for business debts. Send a written notice to each creditor about your intent to dissolve the corporation and pay off any claims that come in.
Make sure to also cancel any lease agreements, vendor contracts, or service subscriptions connected to your business once bills are paid in full. You'll also need to file your final annual registration and federal tax returns.
Step 5: Distribute remaining assets to shareholders
After you've settled any debts, calculate the corporation's remaining assets, including tangible property, real estate, and intellectual property. Distribute these assets to the shareholders according to the rights and privileges that your corporation outlined in its bylaws or articles of incorporation.
Make sure to create written documentation of all shareholder distributions and keep them in your records. Keep in mind that capital gains from asset distributions can have tax implications. Consider consulting a tax professional if your situation is complex with diverse assets and multiple involved parties.
Step 6: File articles of dissolution
Once you've filed the notice and requested its publication, you can officially dissolve your business in the Peach State. You can do this by filing Articles of Dissolution (Form CD 412) with the Secretary of State. Here's what to include:
- The name of your corporation
- Its control number
- The date that you filed your Notice of Intent with the SoS
- A statement that your corporation has settled any existing debts and liabilities
- Another statement affirming that the corporation has distributed (or prepared to distribute) the remaining assets to shareholders, or has deposited them with the SoS
- Affirmation that the corporation is not currently involved in a lawsuit
- The effective date (if not immediately, it can be up to 90 days after filing)
- The current date
- Your signature
- Your relationship to the business (i.e. are you an officer, member of the board, or attorney-in-fact?)
File your articles of dissolution in the exact same way you filed your Notice of Intent to Dissolve, either online or by mail to the Corporations Division. Remember that paper filings incur a $10 service fee.
How do you dissolve a nonprofit organization in Georgia?
A nonprofit corporation in Georgia that has no members with voting privileges, no assets, and hasn't begun charitable activities can simply dissolve their business by filing articles of dissolution for a nonprofit. Otherwise, follow the steps below.
Step 1: Obtain board and/or member approval
Georgia state law requires nonprofit corporations to obtain approval from any members with voting rights before it can voluntarily dissolve. In this case, the board of directors must recommend dissolution to the members, clearly communicate voting details in advance, and base the decision on the majority vote, unless otherwise stated in the bylaws or articles of incorporation.
If there are no members with voting rights, the board of directors can decide whether or not to dissolve the business based on their own majority vote. But, again, they need to ensure all members understand where, when, and how the vote will take place.
Step 2: Create a dissolution plan
If approved, the next step is to create a dissolution plan that outlines how the nonprofit corporation will distribute its assets. This plan needs to outline how the nonprofit will do the following things:
- Settle all of the organization's liabilities, if any exist
- Return any assets that need to be returned
- Transfer any assets that the organization received for a specific charitable, religious, educational, or similar purpose (that doesn't need to be returned) to one or more organizations that exist for the same purpose
- Distribute other assets in accordance with the articles of incorporation or bylaws based on the members distribution rights
If your nonprofit is a charitable organization, it also needs to plan to notify the Attorney General of its intent to dissolve.
Step 3: Notify the Georgia Attorney General and the Secretary of State
Nonprofits also need to file a similar Notice of Intent to Dissolve (Form CD 525) with the Secretary of State. You can also file this notice online through eCorp for free or by mail to the Corporations Division for a $10 paper filing fee.
However, unlike for-profit corporations, charitable corporations must send a similar notice to the Georgia Attorney General either before or on the same day that the file with the SoS. Here's what it needs to include:
- A copy of the dissolution plan
- The current net value of the corporation's assets (at the time of filing)
- A list with the names and last known address of any non-creditor to whom the corporation intends to transfer its assets (if not already included in the dissolution plan)
Unless the Attorney General states otherwise, wait to transfer any assets until 30 days after sending this written notice. Once you've transferred all the assets, send another list to the Attorney General that includes the name and address of every non-creditor who received assets and state which assets they received.
Step 4: File articles of dissolution
You're finally ready to file your nonprofit articles of dissolution (Form CD 530) with the Secretary of State and officially dissolve your business. The form will ask you to provide the following information:
- The name of your nonprofit
- Its control number
- The date that you filed your Notice of Intent with the SoS
- A statement that your nonprofit has settled any existing debts and liabilities
- Another statement affirming that it has distributed (or prepared to distribute) the remaining assets according to its dissolution plan
- Affirmation that the corporation is not currently involved in a lawsuit
- Confirmation that the nonprofit has notified the Attorney General (if it's a charitable organization)
- The effective date (if not immediately, it can be up to 90 days after filing)
- The current date
- Your signature
- Your relationship to the business (i.e. are you an officer, chairperson of the board, or attorney-in-fact?)
File this form online through eCorp, or mail a paper copy along with a $10 service fee to the following address:
The Secretary of State
Corporations Division
2 Martin Luther King Jr. Dr. SE
Suite 313 West Tower
Atlanta, Georgia 30334
How do you close tax accounts when dissolving a Georgia business?
This is a critical step in the Georgia dissolution process. You want to file your final tax returns and close all tax accounts connected to your business before it is officially dissolved.
What final tax returns must you file with the Georgia Department of Revenue?
Including your final federal tax returns, most Georgia businesses will need to file state tax returns with the Department of Revenue one last time. Which state tax forms you'll need to file depends on your entity type:
- Limited liability companies generally file Form 600, Form 600S, or Form 600T
- Corporations file Form 600, Form 600S, or Form 600T
- Nonprofits generally file Form 600T for exempt organizations
When you submit this return, include a written explanation that you intend to dissolve your business entity and mark on the form that this will be the final return.
How to close your Georgia sales and use tax account
The easiest way to close your sales and use account is to do so through the Georgia Tax Center (GTC). Here's what to do:
- Log into your GTC account.
- Select "Sales and Use Account" and then "see more."
- Go to "Management" and click "Request to Close Account."
- Follow the instructions to close the account.
Alternatively, you can email a written request to SalesTax.Business@dor.ga.gov. The email needs to include a letter on company letterhead requesting to close the business account. It should state the date you'd like the account to close and the owner's signature.
How to close your Georgia withholding tax account
You can similarly close your withholding account online through the Georgia Tax Center:
- Log into your GTC account.
- Select "Withholding Account" and "see more."
- Go to "Management" and click "Request to Close Account."
- Follow the instructions to close the account.
Alternatively, you can email a written request to Withholding.Issues@dor.ga.gov. The email must include a letter on company letterhead requesting to close the account. It should state the date you'd like the account to close and the owner's signature.
Do you need a tax clearance letter to dissolve a Georgia business?
You may not need a tax clearance letter to dissolve your business with the Secretary of State, but you should get one. This is an important document for your records that confirms you've met all of your business' tax obligations. You can request this letter through the Georgia Tax Center:
- Log into your GTC account.
- Click "More."
- Select "Request" and then "Request Tax Clearance Letter"
- Go to "Submit" on the Clearance screen and click, "OK" to submit the request.
You should receive a confirmation number after your request processes.
What business licenses and permits must you cancel when dissolving in Georgia?
It's also important to cancel any licenses or permits connected to your business. For example, you may have industry-specific permits, such as alcohol licenses, professional licenses, or health permits, that were necessary to legally operate. Certain cities or counties also require special licenses or permits, such as general business licenses or health permits.
Make sure to also cancel any federal tax permits as well as your EIN with the Internal Revenue Service (IRS). To do this, send a letter to the IRS that states the following:
- The legal name of your business
- Its EIN
- The primary business address
- Your reason for closing the account
Enclose a copy of the original EIN notice letter from the IRS, if you have it, and send the letter to:
Internal Revenue Service
Cincinnati, OH 45999
What is administrative dissolution in Georgia and how does it differ from voluntary dissolution?
Voluntary dissolution refers to a business' decision to officially terminate its existence. Administrative dissolution refers to the state's decision to terminate a business entity because it failed to meet a compliance requirement, such as submitting an annual registration.
How to reinstate an administratively dissolved Georgia business
Once a business entity becomes administratively dissolved by the Secretary of State, it has a period of five years to apply for reinstatement. You can file online through eCorp under the “online services” tab. Or, if preferable, print the application form and mail it to the Secretary of State along with the filing fee. The reinstatement filing fee is $260, but keep in mind that you'll also need to pay any outstanding annual registration fees and penalties.
How much does it cost to dissolve a business in Georgia?
The total cost of dissolving a business in Georgia will depend on many factors, including the cost of debts and other liabilities, final tax returns, and legal assistance if you choose to work with an attorney, which the SoS strongly recommends. That said, it's free to file dissolution documents online with the Secretary of State and $10 to file by mail.
How long does it take to dissolve a business in Georgia?
The full dissolution process can take months. The timeline for your business will depend on factors like its entity type and how long it takes to settle debts and distribute assets. For example, charitable corporations in Georgia need to wait a month between submitting their dissolution plan to the Attorney General and actually distributing their assets.
That said, the Secretary of State generally processes online filings, including dissolution paperwork, in seven to 10 business days. Paper processing typically takes 15 business days.
What records should you maintain after dissolving a Georgia business?
Generally, businesses should maintain all dissolution documents, such as member/board resolutions, proof of publications, creditor notifications, debt settlements and asset distributions, and filing confirmations, for a period of three to seven years.
That said, Georgia's laws on record retention differ by industry. For example, financial institutions have stricter and longer rules for maintaining records. It's best to consult an attorney or search Georgia code for your industry's record-keeping requirements. The IRS also asks most businesses to maintain records for up to four years.
What are the consequences of not properly dissolving a Georgia business?
There are several potential consequences for not properly dissolving a business in Georgia:
- Ongoing annual registration fees if you fail to dissolve your business with the SoS
- Continued tax filing obligations, which could lead to penalties for non-filing
- Potential for administrative dissolution by Secretary of State, which could impact your business credibility
- Personal liability exposure for unpaid debts and obligations
- Difficulty starting new businesses due to unresolved compliance issues
- Potential lawsuits from creditors and claimants
In the end, it's much more cost effective to ensure all boxes are checked and that you've given yourself a blank slate to build on in the future.
Should you hire a professional to dissolve your Georgia business or do it yourself?
Yes, it is always a good idea to seek professional help when closing a business. While some small companies with no debts and straightforward asset-distribution needs can likely handle DIY dissolution, it's best to at least consult a professional to ensure you're meeting federal and state requirements.
LegalZoom offers a happy middle-ground. Our Dissolution Concierge provides a guided solution that allows you to handle certain aspects of the process while supporting you every step of the way. We'll take care of the initial planning, walk you through state specifics, and handle final filings like your annual registration. Let us do the heavy lifting so that you can focus on your next venture with confidence and peace of mind.
FAQs about dissolution in GA
Can I dissolve my Georgia LLC if I have outstanding debts?
No, the Georgia Secretary of State requires businesses to either pay debts in full, negotiate settlements, or make adequate provision for payment before they can file dissolution paperwork. You also don't want to risk becoming personally liable for business debts once the business ceases to legally exist.
What happens to my business name after dissolution in Georgia?
That depends on whether or not the dissolution was voluntary. If you choose to dissolve your business, its name becomes available as soon as your business is officially dissolved. However, the Secretary of State holds onto the business names of administratively dissolved entities for five years.
Do I need to publish a notice in the newspaper to dissolve my Georgia LLC?
No, Georgia law doesn't require LLCs to publish a notice of their intent to dissolve. Only corporations have to file and publish this notice. LLC dissolution in Georgia mainly involves handling your debts and asset distributions and then filing a Certificate of Termination.
Can I reopen my Georgia business after dissolution?
That depends on how the business dissolved. Administratively dissolved businesses have the option to apply for reinstatement for a period of five years. Similarly, businesses that provided an expiration date in their formation documents have ten years after they expire to amend their formation documents and extend their existence.
However, businesses that voluntarily dissolve cease to exist entirely, except for the purposes of representing themselves in court.
What is the difference between dissolution and withdrawal in Georgia?
Unlike domestic corporations, foreign corporations that want to revoke their authority to transact business in Georgia can file an application to withdraw their certificate of authority (Form CD555). This also applies to foreign limited liability companies.