Steps to Dissolve Your Florida Business
- Establish a valuation of your Florida business
- Compile a full account of your Florida business’s debts
- Identify Florida’s official dissolution document
- Follow instructions in your Florida business’s operating document
- Cancel your Florida business’s permits, licenses, and registrations
- Wrap up your Florida business’s legal and financial obligations
- File the Articles of Dissolution for your Florida business
Closing a business is an essential step for a business owner. Maybe you’re moving on to the next chapter in your life by retiring or starting a new business venture. Maybe the business isn’t what you expected, and you’d rather avoid bankruptcy. Whatever the reason, it’s important to notify the state when you dissolve a Florida LLC or corporation. If the state doesn’t receive annual taxes or reports, it might charge penalties or fines that could fall on you as the business owner. Failing to dissolve a business properly might harm your individual credit or future business ventures. Luckily, we’ve put together a simple guide on how to dissolve a business in Florida. You can easily follow these steps when it’s time to dissolve your Florida business.
Before dissolving your Florida business
Even if you don’t see business dissolution on the horizon, it’s beneficial to have a plan for dissolution in place before it becomes necessary. When forming your plan, consider what will happen to your employees, customers, stockholders, and co-owners. You’ll want to keep a secure and thorough record of all corporate or LLC dealings so you can easily access the business’s financial conditions. With your plan in place, you’ll be able to wind up business operations without much effort.
Step 1: Establish a valuation of your Florida business
To start the dissolution process, you’ll begin by valuing the business. This includes accounting for all real estate, inventory, goodwill, and assets the business owns. If you’re not sure how to value things, you can hire a professional. You’ll need to collect all the documents related to your business operations, particularly contracts with third parties and tax information. When you use our Worry-Free Compliance service, the dashboard will keep your business documents organized and make all of your information easier to find when you need it most.
Step 2: Compile a full account of your Florida business’s debts
The next important step is to identify the business’s debts. You’ll need to know how much and who you owe. Think of all your suppliers, delivery services, and lenders. It’s important to know that when you’re closing the business the debts don’t just go away. If you don’t pay off the business’s debts, you might be individually responsible even if you run a corporation or LLC. Shareholders or creditors can sue you as an owner, member, director, or officer for failing to properly wind up the company through a legal process called “piercing the veil.” The legal repercussions for not accounting for all the business’s debts could also keep you from starting a new business venture. Therefore, it’s important to have a full understanding of the debts your business owes, and to develop a process to repay them.
Step 3: Identify Florida’s official dissolution document
When you formed your business, you registered with the Florida Department of State: Division of Corporations (aka the Florida Corporation Commission). To officially dissolve the business, you’ll file a dissolution document with the Division. To dissolve a Florida corporation or LLC, you need to file Articles of Dissolution. The Division accepts documents online, by mail, or in person at the Division’s office in Tallahassee. When you file you’ll also have to pay a filing fee. The Division usually processes documents within two to three days. Filing Articles of Dissolution in Florida officially tells the government, creditors, and customers that you’re closing the business.
Step 4: Follow instructions in your Florida business’s operating document
The LLC’s operating agreement, corporate bylaws, or partnership agreement likely contains instructions for dissolving the business. The operating agreement might specify certain events that signify when the business can close. You might need to get minority member or shareholder approval or send notices. If you don’t have an operating document, you’ll have to follow the default process found in state law.
And remember, if you’re in the business formation stage and need to create an operating agreement, we can help. You can use our operating agreement template to choose the process you want to use to make dissolution easier. No matter what the operating agreement or bylaws say, you still need to file the proper dissolution paperwork with the state to let the government know you’ve dissolved.
Step 5: Cancel your Florida business’s permits, licenses, and registrations
When you started the business, you likely applied for permits or licenses from the state, local, and federal governments. Some of these might automatically renew, which means they might automatically process renewal payments. So it’s important to do your research and be careful about leaving these open. Don’t forget about any industry-specific licenses or permits from your city or county, like zoning permits or professional licenses.
Step 6: Wrap up your Florida business’s legal and financial obligations
To avoid any late fees or penalties, you need to file final tax returns with the Florida Department of Revenue and the IRS. You’ll also want to cancel the business’s EIN from the IRS to let the federal government know you’re dissolving your Florida business. If your business has employees, you need to follow Florida’s labor laws regarding employees and business dissolution. You are required by law to properly issue final paychecks and pay other earned benefits. When you officially and properly wrap up your Florida business’s legal and financial obligations, you’ll prevent any legal repercussions from coming up later.
Step 7: File the Articles of Dissolution for your Florida business
Once the business has wound up operations, it’s time to file your Articles of Dissolution. You need signatures from the person with authority to sign and file documents for the company. A corporation needs to provide proof that it obtained shareholder approval as outlined in the corporate bylaws. Once you file the Articles of Dissolution, your business is officially dissolved and you can move on to your next venture.
Let us help with prepare your Florida business for whatever comes your way
No matter where your Florida business is in its lifecycle, know we’re here to help. We understand that your business is important to you, and you want to start, run, and wind it up the right way. Contact us today and our team of experts can help you form your business, run your business, or prepare you for business dissolution. Rest easy knowing that we’ll be there for your business every step of the way.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
- How do I dissolve a business in Florida?
To dissolve a Florida corporation, you need to file Articles of Dissolution with the Florida Department of State: Division of Corporations.
- How much does it cost to dissolve an LLC in Florida?
To file a dissolution, you’ll pay a filing fee to the Florida Division of Corporations. Fees are subject to change, so check with the division for current rates when you’re ready to file.
- How long does it take to dissolve an LLC in Florida?
The time it takes to dissolve your business depends on your business’s particular circumstances. If your business is large and you have many assets or debts, it’ll likely take longer to close than a small business. Filing the Articles of Dissolution with the Florida Division of Corporations is fairly simple. You just need to provide the name of the business and the effective date of dissolution. You also need a description of the event leading to dissolution that meets the requirements of the operating agreement or statement of consent from the shareholders, members, or partners. When the division files your dissolution documents, your business is effectively dissolved.
- How do I dissolve a nonprofit organization in Florida?
To dissolve a Florida nonprofit corporation, you’ll file Articles of Dissolution with the Florida Division of Corporations. Florida non-profit corporations can follow the same dissolution process as Florida profit corporations.