If you want to dissolve an LLC in Florida, there are steps you will need to take to make it official. The process can be simple or complex, depending on the circumstances of your business and the provisions of your operating agreement.
Why Dissolve an LLC?
There are many reasons why you may want to dissolve an LLC in Florida. Some of the common ones are:
- You have completed the purpose for which you formed the LLC
- You have decided to retire or pursue other opportunities
- You have encountered financial difficulties or legal disputes that make it impossible or impractical to continue the business
- You have agreed with your co-members to end the business relationship
Whatever your reason, dissolving an LLC is a big decision, as it has legal and tax consequences that may affect you and your co-members.
The process of dissolving an LLC in Florida depends on whether you have an operating agreement that governs dissolution.
If you have an operating agreement, you should follow its terms regarding dissolution. If you do not have an operating agreement, or if it does not address dissolution, you should follow the default rules of the Florida Revised Limited Liability Company Act, which is the law that regulates LLCs in Florida.
The act provides two methods for dissolving an LLC in Florida: voluntary dissolution and judicial dissolution.
Voluntary dissolution is when the members of an LLC agree to dissolve it by their own will. To voluntarily dissolve an LLC in Florida, you need to:
- Obtain the consent of all the members, unless your operating agreement allows for a lower percentage of approval
- File articles of dissolution with the Department of State. The articles of dissolution must include:
- The name of the LLC
- The date of filing of its articles of organization
- The date that dissolution was approved by the members
- A statement that all debts, obligations, and liabilities of the LLC have been paid or discharged
- A statement that there are no actions pending against the LLC in any court
- A statement that all remaining assets of the LLC have been distributed among the members in accordance with their respective rights and interests
- The name, address, and signature of a person authorized to file the articles of dissolution
- Notify your creditors, customers, suppliers, employees, and other parties that you are dissolving your LLC
- File final tax returns and pay any taxes due at the federal, state, and local levels
- Cancel any licenses, permits, registrations, or other authorizations that your LLC obtained to conduct its business
Judicial dissolution is when a court orders the dissolution of an LLC upon the request of a member or another party.
A court may order judicial dissolution of an LLC in Florida if:
- The conduct of all or substantially all of the LLC’s activities is unlawful
- It is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement
- The managers or members in control of the LLC have acted, are acting, or will act in a manner that is illegal, oppressive, fraudulent, or unfairly prejudicial to one or more members
- The assets of the LLC are being misapplied or wasted
- The members are deadlocked and unable to break the deadlock
To request judicial dissolution of an LLC in Florida, you need to file a petition with the circuit court in the county where the principal office of the LLC is located. You also need to serve a copy of the petition on all other members and managers of the LLC.
The court will then hold a hearing and decide whether to grant or deny your petition. If the court grants your petition, it will appoint a receiver to take charge of the LLC’s assets and affairs and wind up its business.
The receiver will then file a report with the court and distribute any remaining assets among the members according to their respective rights and interests.
Before dissolving your LLC, you should consider:
- The impact of dissolution on your personal and business finances, taxes, liabilities, and reputation
- The possibility of resolving any conflicts or disputes with your co-members or other parties without dissolving the LLC
- The availability of alternative options, such as selling or transferring your interest in the LLC, converting the LLC to another type of entity, or merging the LLC with another entity
- The terms and conditions of your operating agreement, contracts, leases, loans, and other agreements that may affect or be affected by dissolution
- The advice and assistance of a qualified professional, such as a lawyer, accountant, or business consultant, who can help you understand and comply with the legal and practical aspects of dissolution
Looking to Dissolve an LLC in Florida? We Can Help You
If you are thinking about dissolving an LLC in Florida, you will need the help of a trusted and experienced law firm that can guide you through the process and protect your interests, like Jurado & Associates, P.A.