For a variety of reasons, there may come a time when it’s time to close a corporation through dissolution. If you are at this stage with your business, you’ve probably wondered how to dissolve a corporation in Florida.
Dissolving a Florida corporation involves two primary steps: dissolving the corporation in the eyes of the law, and then winding up its affairs.
Depending on the status of your business at the time of dissolution, there are some other specific steps you may need to take.
1. File the Articles of Dissolution
To dissolve a Florida corporation, the very first step is to obtain approval from either the corporation’s directors or its shareholders. In most cases, shareholders must approve the dissolution before you can take an official action toward Florida corporation dissolution.
However, if the business has not issued any shares at the time of dissolution, then the board of directors or a majority of incorporators may approve the dissolution instead.
Once the appropriate group approves the dissolution, you can file your articles of dissolution (along with the required cover letter) with the Florida Division of Corporations (DOC). These articles must include:
- The name of the corporation;
- The corporation’s date of formation; and
- The date the corporation’s shareholders or directors approved the dissolution.
The DOC accepts Articles of Dissolution online or by mail. Both filing methods require a $35 filing fee, however the DOC usually processes online applications slightly faster. The DOC also strongly encourages business owners to have a business law attorney review the documents before filing.
Can I Revoke My Dissolution of Florida Corporation?
Florida does permit corporations to revoke their dissolution within 120 days of the effective date of the dissolution.
Note that other companies may use your business’s name one year after the effective date of the dissolution. If you wish to reinstate your corporation after this period, you will have to make sure your desired name is still available.
2. “Wind Up” the Corporation
“Winding up” is a legal term that refers to a corporation’s obligation to handle its outstanding financial affairs before finally dissolving. At this stage, your corporation exists only for this purpose. As a result, it can no longer conduct other business.
Common winding up tasks include:
- Collecting and organizing the corporation’s assets;
- Distributing any remaining corporate property between the shareholders and disposing of assets that will not be distributed; and
- Discharging the corporation’s remaining liabilities.
Properly dissolving and winding up your corporation is important. Although the DOC will automatically dissolve your Florida business for failing to file the required annual reports, you will still be on the hook for any applicable late fees.
3. File a Notice of the Dissolution
Before distributing any assets to shareholders, the corporation must settle any outstanding business taxes and debts owed to creditors. Accordingly, when dissolving a corporation in Florida, it is important to properly notify any potential creditors.
This process involves providing a notice to the corporation’s creditors of the business’s dissolution. Ideally, this notice should be provided directly to each potential claimant.
However, in situations where all claimants are unknown, you may give notice by filing a separate notice with the DOC or publishing that notice in a newspaper.
4. File for Dissolution in Other States If Applicable
When a company wishes to conduct business in a state other than its state of incorporation, typically that company must “qualify” itself to do business in that foreign state. Similarly, when dissolving Florida corporations, you must officially terminate the business in any foreign states in which you registered it.
5. Wrap Up Any Other Outstanding Business Matters
Winding up is just one stage of closing a corporation in Florida. As a practical matter, there are several things business owners should make note of even after the business is wound up. Many businesses, especially if they are large in size, will have property that they need to dispose of properly.
For example, the business should handle the transfer of office equipment and real estate as part of the closing process. Outstanding business matters may also include new or pending legal proceedings against the corporate entity, and the authority of the corporation’s registered agent may also come up.
Florida law also requires all corporations to maintain a registered agent to receive and accept service of process on the business’s behalf.
Keep in mind that dissolution will not automatically change the registered agent’s authority; business owners must make sure to take the proper steps to terminate the agency relationship if necessary.
Most (if not all) of these matters will be addressed during the winding up phase. Nevertheless, it is important to keep them in mind to ensure that the business does not leave behind any loose ends.
Need More Information on How to Dissolve a Corporation in Florida?
Emmanuel Sheppard & Condon offers a full suite of legal services to businesses in Pensacola and the surrounding areas.
If your business has reached the end of its lifecycle, our attorneys can provide you with more information on how to close a corporation in Florida.
To get started, contact us today online or by phone at 850-433-6581 for a free consultation.