There are many reasons why a court will order a LLC to dissolve, but this occurs after someone files a lawsuit with a court. Similar to a judicial dissolution, there are several reasons why the state would dissolve a LLC. Pay Creditors Next, after filing the Articles of Dissolution, the business is only allowed to operate to settle claims with creditors and distribute its assets.
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Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Make sure you follow any specific procedural requirements that may be part of the dissolution rules, such as setting a specific time to meet and vote and giving advance notice to all members regarding the meeting.
Also, unless your articles of organization or operating agreement state otherwise, Florida's LLC Act allows for an alternative method to voluntarily dissolve an LLC: written consent of all LLC members. For either approach to dissolution of your LLC—relying on rules in formational documents or on unanimous written consent—you should make sure to record the decision to approve the dissolution in the official minutes of the dissolution meeting or on a written consent form.
By the way, be aware that dissolution, alone, does not prevent a new legal proceeding, or abate an existing legal proceeding, by or against your LLC. Following dissolution, your LLC continues to exist only for the purpose of taking care of certain final matters that, collectively, are known as winding up the company. You may choose to designate one or more LLC members or managers to handle the winding up.
When it comes to the last two listed items, discharging liabilities and making distributions to members, you are required to make payments in a particular order. First, you must pay creditors, including LLC members who are creditors, to the extent permitted by law. Note that it is particularly important that you pay all outstanding taxes. Next, unless otherwise provided in your operating agreement, you must pay current and former members any required interim distributions and any distributions due to members who have withdrawn from the company.
Interim distributions generally are approved payments to members unrelated to dissolution. Finally, unless otherwise provided in your formational documents, you must distribute any remaining assets to members pro rata in proportion to their then-current percentage, or other interests in the profits, of the LLC.
One other key task is giving notice to creditors and other claimants of your LLC's dissolution. Giving notice is optional.
However, doing so will help limit your liability and also allow you to more safely make final distributions to members.
Under Florida law, one way to give notice is by sending a written document directly to known claimants after dissolution. Proper written notice must:. LLCs that give written notice in this form must also given the same type of notice to persons with claims that are contingent, conditional, or unmatured, along with a request that those persons present their claims in accordance with the terms of the notice.
There are quite a few additional rules for how to handle existing and future claims. Therefore, while there are advantages to giving written notice of your LLC's dissolution to individual claimants, if you choose to give notice you should strongly consider getting assistance from a business attorney.
The filing may either be done on paper or online. Your articles of dissolution must contain certain basic information about your dissolved LLC, including:.
An articles of dissolution form, available for download from the DOS, also requests that you provide the date on which your LLC's articles of organization were filed and the DOS-assigned document number. Below is some additional information to further enhance your understanding of the LLC dissolution process in Florida. The cost to dissolve an LLC in Florida will vary from business to business based on the assets and other administrative needs.
A limited liability company will generally incur expenses for legal, accounting, and other services e. Additionally, small filing fees exist for filing articles of dissolution and other forms with the state. As mentioned above, you can dissolve an LLC in Florida when a dissolution event occurs such as the written consent of the members or a court order to end the business.
A lot of our clients want to know, can LLC members sue each other , or are there legal problems that require filing a lawsuit against one or more LLC members. In short, yes. LLC members can take legal action against one another. The most common reason for LLC members to seek court intervention is when two members with equal voting power become deadlocked on a material issue. In the absence of tie-breaking clause in the operating agreement, the parties will need to take legal action for the court to resolve the impasse.
More information on how to close a company in Florida online, and online filings for the articles of dissolution are available by following the secretary of state's online instructions at sunbiz.
Cueto Law Group is a Miami-based, boutique law firm whose attorneys handle matters involving commercial transactions and litigation. The firm — founded by international business attorney, Santiago Cueto — regularly provides legal advice to clients on matters related to dissolving LLCs and other entities. We can schedule a consultation to learn more about your legal needs and how Cueto Law Group may help. The amount of time it takes to dissolve an LLC fluctuates from business to business.
The actual processing of the articles of dissolution only takes a few days. However, the other steps of repaying debts, selling assets, filing taxes, and distributing liquidated proceeds to members can take months or longer.
The consequences of incorrectly dissolving an LLC can be substantial. You may have exposure to lawsuits from creditors, members of the LLC, or other interested parties.
Tax liability and penalties are another risk. Errors can easily occur due to an improper sale of assets or distribution to members. Cueto Law Group P.
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