When a limited liability company (LLC) reaches the end of its life, properly closing it is important. There are several steps you may take, including many required by law. Accordingly, you should understand how to dissolve an LLC in Florida before doing so.
Dissolving a Florida LLC has three main stages: making sure dissolution is appropriate under the circumstances; taking care of the LLC’s remaining obligations; and filing the articles of dissolution.
Once the Florida Division of Corporations (DOC) processes your articles of dissolution, your LLC ceases to exist as a legal entity, except for the purpose of winding up its affairs.
1. How to Dissolve an LLC in Florida: Triggering the Dissolution
A majority of LLCs function under an operating agreement, although it is not technically required. This document serves as an agreement between the owners or members of a Florida LLC regarding how they will run the business.
If present, the operating agreement will govern how and when dissolution should occur.
For example, an operating agreement may say that dissolution occurs if one of the founding members dies. Regardless of what it says specifically, make sure you review your LLC’s operating agreement before proceeding with dissolving an LLC in Florida.
For LLCs without an operating agreement, the Florida Revised Limited Liability Company Act provides some default options. Generally, this Act permits dissolving an LLC in Florida:
- Upon unanimous consent of the LLC’s members;
- If 90 days pass during which the LLC has no remaining member;
- A court enters a decree of judicial dissolution; or
- The Florida DOC files a statement of administrative dissolution, usually based on the company’s failure to provide annual reports or fees.
Once the appropriate condition triggers dissolution, the winding up process for the LLC begins.
2. Settling the LLC’s Debts and Other Obligations
When you dissolve an LLC in Florida, it’s likely that the LLC still has some unpaid debts. Florida law requires LLCs to distribute their assets in a particular order while winding up. As a result, it is very important that you follow this order properly to avoid potential legal liability.
First, the LLC must use its assets to discharge its obligations to creditors, including any remaining taxes owed. A creditor can be anyone outside the company to whom a debt is owed or any member who made personal loans to the company.
A crucial part of how to dissolve an LLC in Florida is properly handling these claims. There are specific notice requirements for known and unknown claimants you must follow.
We recommend speaking with a Florida business law attorney who can advise you of your options and how to comply with these requirements.
3. Distributing Remaining Assets to Members
If there are still assets left over after paying all creditors, distributing those assets to the LLC’s members is the next step in LLC dissolution. Florida law requires LLCs to make these distributions in the following order:
- First, to interest holders with unreturned contributions; and
- Second, to current and dissociated members in proportion to their contributions.
Once the LLCs members have received their distributions, it is almost time to file the Florida LLC articles of dissolution.
4. Wrap up Any Out-of-State Business Registrations (If Necessary)
Many businesses choose to operate in more than one state. To do so, however, a business must register in any foreign state in which it wants to conduct business. If this is the case for your LLC, make sure to properly close out these foreign registrations during the Florida LLC dissolution process.
Each state handles foreign business entities differently, so make sure to check each relevant state’s laws for specifics.
5. File the Articles of Dissolution
The last step is to file the articles of dissolution with the Florida DOC. Florida offers online or paper filing with a fee of $25. There may be additional fees for certified documents.
Additionally, the Florida DOC strongly recommends hiring legal counsel prior to submitting any documents. The Division’s website provides more information about how to close an LLC in Florida.
Need More Information on Florida LLC Dissolution?
Emmanuel Sheppard & Condon is a full-service law firm well equipped to handle your business law needs. For over 100 years, we have helped clients start and end their businesses, as well as assisted in a variety of other business law matters.
If you need to dissolve your Florida LLC, we can help. To get started, contact us today or give us a call at 850-422-6581 for a free consultation.