Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Georgia are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Georgia has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Georgia LLC dissolution process? Are there different processes for businesses based in Georgia and those expanded from other states? When do you need to dissolve your LLC? We’ll answer all of these questions and more in this article.
How Do You Dissolve a Georgia LLC?
When closing a business registered as an LLC in the state of Georgia, you’ll need to take care to dissolve your business exactly as the state outlines. The most important part of this process is filing the correct paperwork with the relevant legal entities, but this is far from the only vital step.
In addition to filing documentation of your Georgia LLC dissolution, you will need to liquidate the assets of your business, notify all individuals and business entities that have an interest in your company, and resolve any outstanding liabilities with vendors, suppliers, or clients.
There are potentially severe penalties for failing to comply with the Georgia LLC dissolution process, and you as a business owner could be personally responsible for your LLC’s liabilities and debts. Therefore, it’s extremely important that you complete each step outlined in this guide to ensure an effective and compliant dissolution.
As for the question of when you should dissolve your LLC, you should do this as soon as you’re certain you will no longer conduct business through this entity. This gives you an opportunity to close up shop with the knowledge that you’re not transacting any business after you start the dissolution process.
Dissolution for Domestic Georgia LLCs
Is your LLC based in Georgia, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Certificate of Termination, which you can fill out on paper or online. This form will include some crucial information about your business, so you should fill it out carefully and accurately.
Among the info you’ll need to complete this form is the official business name of your LLC, your Georgia entity control number, along with your printed name, signature, email address, and the date. In addition, you’ll need to choose one of two statements in three separate sections. Let’s quickly walk through those three articles before we move on:
Article Two (choose one):
- All known debts, liabilities, and obligations of the limited liability company have been paid, discharged, or barred.
- Adequate provision of the debts, liabilities, and obligations of the limited liability company have been made therefor.
Article Three (choose one):
- There are no actions pending against the limited liability company in any court.
- Adequate provision has been made for the satisfaction of any judgment, order, or decree that may be entered against the limited liability company in any pending action.
Article Four (choose one):
- The certificate of termination shall be effective upon filing with the Secretary of State.
- The certificate of termination shall be effective on: [Date] at [Time].
After you’ve filled out the form, you will need to submit it to the Georgia Corporations Division. If you choose to file this form via mail, there is a $10 filing fee, but if you file it online, it is free of charge. Online filings typically take the state 5-7 business days to process, while paper filings usually take 15 business days.
If you need your dissolution processed faster, you can expedite it for an additional fee. For two-day processing, you’ll pay an additional $100. If you need same-day service, the Secretary of State will fulfill this request for $250. If you’re really in a hurry, their one-hour processing costs $1,000.
But what does this process look like for a business that was formed outside the state and then expanded to Georgia?
Dissolution for Foreign LLCs in Georgia
If you operate a foreign LLC in the state of Georgia, the dissolution process looks quite different than it does for domestic entities. In fact, it’s actually technically called a withdrawal rather than a dissolution.
To dissolve a foreign LLC in this state, you’ll first complete the Application for Withdrawal of Certificate of Authority document, which like the Certificate of Termination may be filed on a paper form or online. Much of the information for this form is the same as the info provided for the Certificate of Termination, but there are some differences for the foreign version.
This form requires you to indicate your entity type, your entity control number, the jurisdiction where the LLC was originally formed, contact information for the state to send future service of process deliveries, and your signature, date, printed name, email address, and official title.
After you fill out the form, you can submit it to the Secretary of State. There is no fee if you file online, but there is a nominal $10 fee for paper filings. The turnaround times for this filing are the same as they are for a domestic LLC in this state. Online filings take around 5-7 days, paper filings take roughly 15 business days, and there are several expedited options available.
Involuntary Dissolutions in Georgia
We should also discuss the potential for an LLC to be involuntarily dissolved by the state. There are several reasons this could happen, and most of them revolve around significant mistakes made by the LLC’s ownership group.
For instance, Georgia could involuntarily dissolve your LLC if you fraudulently formed it in the first place, do not appoint a registered agent (or if you let your registered agent lapse), fail to file your annual reports in a timely manner, or otherwise abuse the privilege to operate a business in Georgia.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, the penalties can be even steeper than you might realize. For example, only domestic entities can be reinstated in this state — foreign entities will need to start over from scratch by filing a new Application for a Certificate of Authority. Meanwhile, domestic entities can seek reinstatement, but you may owe a variety of fines and back fees before you get your business back in compliance with regulations.
In addition, if you keep operating your business after the state involuntarily dissolves it, you could open yourself up to all sorts of legal issues due to the continued operation of a non-compliant entity. In general, you should be as careful as possible when it comes to following the rules and regulations in this state.
It’s not that the process for dissolving or withdrawing your LLC in Georgia is terribly difficult. However, it is a process that you need to take great care to complete in a compliant fashion, or you could expose your business to a wide variety of potential legal complications and financial penalties. Trust us when we say it’s much smarter and easier to simply follow the directions with care to avoid any issues.
Do you need more information about operating an LLC in Georgia? Take a look at the following resources: