Florida Dissolution
There comes a time when a business owner has no other choice but to let go of a company. Whether it is because the company has served its purpose or has encountered unfortunate circumstances, choosing to close it can be a sad and hard decision. What is important is the business owner closes it formally following state laws.
What Is Florida Dissolution?
Companies operating in Florida are registered with the state. Thus, it is necessary to officially end their existence through the proper process known as dissolution. Through this, the company informs the state that it will no longer conduct business activities and have no more tax obligations.
Why Does A Company Dissolve?
Why do companies need to dissolve? – Florida requires all companies operating within the state to dissolve officially when they decide to stop their operations. When forming a business in the state, your company had to go through a process and file paperwork. The same will be necessary to end its existence.
Who makes the decision to dissolve? – LLCs need their members’ approval, while corporations require the board of directors to come up with a resolution that the shareholders will vote on during a meeting.
How long does it take to dissolve a business? – The time frame to complete the whole Florida dissolution process may vary. It will depend on how long it will take your company to deal with all its responsibilities, such as approval of a resolution, completion of necessary documents, and settling all obligations. You may also have to consider the processing time of the Department of State. It normally takes a week. However, it may also change, depending on the office’s workload.
What Happens If Your Company Does Not Formally Dissolve?
Your company remains a state-registered entity until it formally dissolves. Thus, it will still need to file annual reports and pay taxes. Failure to file these documents and pay for the fees may lead to penalties.
Steps To Dissolve Your Business
Your company has to go through the process that Florida has set for companies that want to dissolve. Understanding the steps and making sure that your company follows each of them can help ensure a smooth transaction.
1. File Articles of Dissolution with the state – Companies may file the Articles of Dissolution form and cover letter by mail with the Department of State. The filing can also be done online and only requires a document filing number to start the process. You may perform a records search with your business entity’s name to find the number.
2. Remove all liabilities and obligations – The process of winding up is an important task. Your company may designate one or more members or officers to handle the winding up of the business. Under Florida law, companies shall:
- Collect all assets
- Dispose of properties you cannot distribute in kind
- Remove liabilities or make provisions to pay for them
- Distribute remaining assets
3. Give notice to any claimants – To limit your liability and safely distribute the assets of the company, you may send a notice to all known claimants. Inform them about the dissolution, where they can send claims, and the deadline, which cannot be fewer than 120 days after the notice’s date of effectivity.
4. Tax clearance – Fortunately, the state of Florida does not require businesses to secure a tax clearance when dissolving. However, make sure that your company pays for all its tax obligations to avoid possible issues. You must also check the final return box on your company’s IRS form for federal tax purposes.
5. Close all bank accounts, credit lines, permits, and licenses – With the company funds, settle all obligations and payments due. After that, close all bank accounts under the company name since you will not be able to use it for other businesses. You should also cancel the company’s permits and licenses since you will no longer need them.
How DoMyLLC can assist with streamlining the process
Closing a business requires you to handle various responsibilities and perform many tasks. However, not everyone has time to learn and understand each step. If this is the case for you, you may have to rely on a professional. Our services include personalized solutions and live support from a team of experts. Contact DoMyLLC now and let us assist you with your company’s Florida dissolution.
Florida Dissolution FAQs
Is There A Filing Fee To Dissolve The Business?
The filing fee for LLCs in Florida is $25. Corporations have to pay $35.
Do You Need The Department Of Revenue Clearance Before The Secretary Of State Will Accept Your Dissolution?
No, Florida does not require it.
How Long Does The State Take To Process The Dissolution?
The normal processing time for mailed documents is around 1 week. On the other hand, the processing of online filings takes 2-4 days. The state can process walk-in filings while the representative waits.
When Can Another Business Use Your Company Name?
The state will protect your company name for 1 year from the dissolution date. Thus, other business entities will not be able to use it during that period.