When a business owner first opens a business, dissolving the business may be the last thing on their minds. However, many business owners end up having to make the difficult decision to shut down their business due to financial difficulties or personal matters. Dissolving your business correctly is important to protect your finances and ensure future stability.
How do I close my business?
The process for closing your business in Georgia will depend on the type of business you own. The more paperwork you filed when you first opened the business, the more you will have to file during the closing process. Here are some of the general steps involved in closing down a business:
- Decide to shut down – The process begins with all owners agreeing to close the business. If there is only one owner, as with a sole proprietorship, the decision-making process is often straightforward. However, partnerships with two owners may have a more difficult time coming to an understanding.
- File dissolution documents – Next, you will need to document the decision with a written agreement and file dissolution documents pursuant to your articles of organization and state requirements.
- Cancel permits and registrations – When your business closes, you will no longer need the licenses, permits, etc. used by your business. You can save a lot of money by canceling them immediately.
- File taxes – Make sure you file your final income tax return, cancel your employer ID number, pay your employees, and follow any other steps required by the IRS.
- Pay debts and distribute assets – Paying off remaining debts owed to creditors and then distributing the remaining assets are important parts of the winding up process.
Until the dissolution process has been completed, the business remains in a state of limbo. Dissolving a business can be a complicated process, so involving a competent and well-versed business law attorney is essential to avoiding problems later on.