Dissolving a Limited Liability Company (LLC) in Florida involves multiple detailed legal steps to ensure compliance with state laws and secure a clean closure. This guide explores these steps thoroughly, with particular emphasis on handling financial liabilities and adhering to statutory timelines for claims.
Step 1: Review Your LLC Operating Agreement
The first step in the dissolution process is to review your LLC's operating agreement. This document usually provides specific guidelines for dissolution, such as the required member vote and notice procedures. If your LLC lacks an operating agreement, get one. Otherwise, you must look to Chapter 605 for default provisions.
Step 2: Hold a Vote to Dissolve
Florida law generally requires that the decision to voluntarily dissolve an LLC must be approved by its members. See Fla. Stat. § 605.0701. [1] Organize a formal vote during a meeting designated for this purpose. Document every aspect of this meeting, including the discussion points, the vote outcome, and any dissenting opinions.
Step 3: Settle Debts, Obligations, and Notify Creditors
Before proceeding with the dissolution, all debts and financial obligations must be settled. This includes notifying all known creditors. Florida law requires specific actions for dealing with known and unknown creditors, which must be strictly followed to limit future liabilities.
Handling Known and Unknown Claims
- Known Claimants: Send a written notice to all known claimants, outlining the dissolution and providing them with a deadline to submit their claims. The statutory deadline for creditors to submit claims is usually within 120 days from the date they receive the notice. See Fla. Stat. § 605.0711.
- Unknown Claimants: Publish a notice of the LLC's dissolution in a local newspaper of general circulation. This serves to notify potential claimants who might not be known directly by the LLC.
Step 4: File Articles of Dissolution with the Florida Department of State
Submit the Articles of Dissolution to the Florida Department of State. This filing must include key details about the dissolution process, affirmations that all creditors have been appropriately notified, and that proper steps have been taken to settle claims.
Step 5: Handle Tax Clearance and Final Returns
Ensure all tax liabilities are resolved before fully winding down. File the final tax returns for the LLC, clearly marking them as "final." If necessary, obtain a tax clearance certificate from the Florida Department of Revenue to prove all state tax obligations have been fulfilled.
Note: here’s where it is helpful to have a trusted tax professional to help guide you through properly winding down the LLC’s tax issues to avoid potential problems in the future.
Step 6: Distribute Remaining Assets
After satisfying all debts and resolving claims, distribute the remaining assets among members as specified in the operating agreement or according to state law if the agreement is silent on the matter.
Step 7: Close All Business Accounts
Finally, close all business-related accounts, cancel any remaining business licenses, and terminate contracts or leases. This ensures no ongoing liabilities or financial activities continue under the dissolved LLC.
Conclusion
Dissolving an LLC in Florida requires careful planning and adherence to legal protocols, especially concerning financial liabilities and creditor notifications. By following these steps and respecting statutory timelines for addressing claims, you can effectively dissolve your LLC with minimal risk. If you have questions about how to properly dissolve your LLC (or to plan for it), contact the Business lawyers at MSD-Business for a free consultation.
Additional Resources
- Florida Statutes, Chapter 605.
- Florida Department of State, Division of Corporations, provides guidance and forms for filing Articles of Dissolution.
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About the Author:
Chase Carpenter is a partner in the Business Division of Law Offices of Moffa, Sutton, & Donnini, P.A.. His practice revolves around business transactions and business litigation. Mr. Carpenter handles a wide range of cases including contract drafting, partnership disputes, commercial leases, and construction litigation. These cases encompass diverse industries, including healthcare, technology, real estate investment, and government contracting.
About the Firm:
The Law Offices of Moffa, Sutton, & Donnini, P.A., also known as MSD Business, is a local business law firm in Tampa, FL, serving clients throughout Fort Lauderdale and statewide. Our firm has a long history of helping clients navigate all types of complex legal matters, including local and state tax issues. In our business law practice, we assist clients with everything from mergers and acquisitions to contract disputes, business litigation, general counsel, and more.
[1] Note: see section 605.0701 for other events causing dissolution. There are also other dissolutions, such as judicial dissolution which is not addressed in this article.