Reasons for Dissolution of an LLC in Florida
A dissolution of an LLC in Florida may occur when the purpose of the LLC has been completed, or the business is no longer viable economically.3 min read
A dissolution of an LLC in Florida may occur when the purpose of the LLC has been completed, or the business is no longer viable economically. It may also be dissolved if the founding members of the LLC cannot agree on important fundamental decisions and all parties are in agreement that it should occur. The owners of the LLC have the option to dissolve voluntarily at any time.
Despite good intentions from all involved, arguments may arise regarding the amount of time each party dedicates to the business, how profits and losses are divided, what direction the company is going in, or which business opportunities should be pursued.
A Limited Liability Corporation, or LLC is initially formed under state law, and each state has different requirements. Typically, a document needs to be filed with a state agency and a certificate of formation is filed with the secretary of state. The LLC can be formed in order to serve any lawful purpose, and may or may not be formed with a particular duration included.
A Florida LLC can be dissolved in one of three ways- voluntarily, administratively, or judicially. A voluntary dissolution consists of the following steps:
- Member authorization
- A state filing of the articles of dissolution
- Winding up
- A statement of termination is filed
Winding up is when the LLC finalizes it's affairs, gathers and liquidates assets, dissolves or makes provisions for debts and any other responsibilities, and then distributes anything left over to its members. The LLC is required to apply its assets towards debts and creditors, before distributing any remaining assets to the members. Failure to complete the winding up stage properly may result in the members of the LLC becoming personally responsible to the creditors of the business.
An LLC is dissolved of claims by issuing a written notice of the dissolution any time after its effective date to all known claimants including:
- An overview of the claim that may be presented
- Whether the claim is recognized or not
- A mailing address to send information
- The deadline that the claim may be presented, which must be at least 120 days after the dissolution date
- Statement that the LLC may make distributions after this date to other claimants or members
The LLC still has the right to reject any presented claim in writing within 90 days of receiving the claim. Notice must also be given of dissolution to potential claimants in which claims are dependent on certain events, and request that any claims are made in accordance with the terms provided. Any contingent claim must be offered security within the span of 90 days from receipt of the claim.
An LLC which is dissolved and does not follow statutory procedures with regard to claims must make reasonable attempts to pay all outstanding obligations to the LLC. If there are sufficient funds, provisions must be made for the payment of these claims, including conditional or unmatured claims, or any claim where the claimant is unknown.
Once the winding up process is done, the company then proceeds to file a statement of termination with the state of Florida. The statement of termination must very specifically include certain items:
- The name of the LLC
- The date of filing of the initial articles of organization
- The date of filing of the articles of dissolution
- That the LLC has completed the proper steps and handled affairs appropriately
- Any other information that is required by the representative handling the case
An LLC in Florida is required to be dissolved under certain circumstances. At the occurrence of any of these circumstances, the LLC must present the articles of dissolution to the state for filing.
- At the time specified in the operating agreement or articles of organization
- When certain events occur, as specified in the operating agreement or articles of organization
- All members of the LLC provide written consent
- There are no remaining members
- An order of dissolution by circuit court
As long as the LLC has at least one remaining member, if one member leaves, it does not force the dissolution of the Limited Liability Corporation, unless the articles of organization state differently.
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