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Remember these 6 steps when dissolving your business

Many business owners will face the day when it is time to shut down their business. Whatever the reason, eventually the time may come when your company must cease operations and be dissolved.

The legal complexities of dissolution can vary from case to case— after all, no business is exactly the same. There are a few main steps, however, that every business owner will have to take. Here are six key steps to remember when it comes to dissolving your business:

1. Approve the dissolution

First, the business owner must approve of the dissolution: In limited liability company (LLC), this means the members; in a corporation, the shareholders.

2. File with the state

Next, the appropriate paperwork should be filed with the state of Georgia and any other states in which the company was qualified to conduct business.

3. File tax forms

Yes, even if your business is ending operation, you must still file federal, state and local taxes. Business owners must also formalize the dissolution with your local and state tax agencies as well as with the IRS.

4. Contact your creditors

All of a company’s creditors must be notified by mail and told about the intent to dissolve, the mailing address where they can send their claims, the information that should be in the claim, the deadline for submission and a statement that any claims will be barred if they miss the deadline.

5. Settle any claims

You can either accept or reject claims from your creditors. Either way, be sure to work with an attorney to reach a satisfactory arrangement with each creditor.

6.  Distribute assets

Any remaining assets should be distributed to company owners in proportion to their share of ownership and reported to the IRS.

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