When you started a business, you were probably filled with excitement. You may have thought of success. However, many circumstances affect the way an entrepreneur decides to run their business. There may be a time where you are no longer able to keep your business open, even if it is hard to do.
Coming up with such a decision may have taken a lot of time and thinking. But, there are times when letting go is the best route. To avoid any problems in the future, you will have to make sure you know how to dissolve an LLC properly and legally with the state.
Deciding To Dissolve An LLC
Deciding to close a business does not automatically put an end to your company. As a business owner, you will need to conduct a variety of tasks. You also need to make sure you are following the process that the state of Florida implements. Failure to complete the said process comes with various consequences.
When you first registered your LLC in Florida, you had to submit formal paperwork. Likewise, your company also needs to submit documents with the Department of State. This way, you are making sure that the state is aware that your company is no longer conducting business and has no more tax obligations.
- Check the formational documents of the company. There are also times when the company realizes it is time to end its operations. In these situations, your LLC will have to check its formational documents first. These are the Articles of Organization and Operating Agreement. Most companies put a section that contains rules on how to dissolve an LLC. Generally, it includes details on the number of votes members require necessary to finalize the dissolution. Follow the procedure that your formational documents state.
If your company did not include an item about dissolution in its formation documents, your LLC will have to follow the LLC Act of Florida. It provides an alternative method for LLCs that want to dissolve. What you will need is the written consent of all members. The decision has to be unanimous.
No matter which procedure you wish to follow, you will have to make sure that the resolution is on record. You can include the approval of the dissolution in the official minutes of the meeting. You may also put the details on the written consent form.
- Finish the winding-up process. Even after the dissolution, your company will still continue to exist to take care of the winding up of the business. You can either designate a member, manager, or a team to handle this step. Make sure your company completes all tasks as stated under the LLC Act of Florida.
– Collect all assets
– Dispose of the properties that you cannot distribute in kind to members
– Make provisions to settle all its liabilities
– Distribute the assets to creditors and members
The law also requires you to follow a particular order when it comes to settling liabilities and distributing assets. You need to prioritize the payment to creditors. You will also need to pay any outstanding taxes. Then, you will also have to pay current and/or former members any distributions due to those who have withdrawn from the LLC. Last, you have to distribute the remaining assets of the company in proportion to rights and interests.
Even though the state does not require LLCs to give notice to creditors and claimants, doing it can help you finish your obligations faster. Additionally, it will also limit liability and will let you distribute assets safely. If you choose to give notice, you can do so by sending a written notice. It has to include the following information:
– Describe the claim that creditors are entitled to assert
– A statement clarifying if the claim is admitted or not, in whole or part, the amount admitted, and interest obligation if fixed by an instrument of indebtedness
– Mailing address where claimants can submit
– The deadline for claims, which cannot be less than 120 days after the date of the notice
– A statement saying that the LLC can start distributing assets to other claimants and members after the deadline
- Submit the necessary paperwork. As stated earlier, your LLC will have to submit formal paperwork with the Department of State. This document is known as the Articles of Dissolution, which is something you can download from the website of the Department of State. You can file online or on paper. The filing also comes with a $25 fee.
To ensure compliance, you will have to provide the following information:
– Name of the LLC
– The date the dissolution takes effect
– Description of the occurrence resulting in the dissolution
– A statement that the LLC paid, settled, or made provisions to take care of all debts, liabilities, and obligations
– A statement that your LLC has distributed all remaining assets and properties following the rights and interests of each member
– A statement that there are no pending lawsuits against the LLC or that it has prepared adequate provision to satisfy any judgment, decree, or order for pending cases
The state may take approximately a week to process paper filings. If you choose to do it online, you will have to wait for only 2-3 business days.
If you have registered your company in other states too, you will have to find out how to dissolve an LLC in those places. You can check out the website of the appropriate agencies handling LLCs in those states.
Closing an LLC requires you to follow the dissolution process. If you need additional information, you can consult with a reliable company such as DoMyLLC. Our team of experts is ready to guide you through the whole ordeal. We also offer live support and personalized solutions. Contact us now to learn more about our services and how we can help you.
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