How to Properly Dissolve Your Business
Written on July 21, 2017
Florida law requires business owners to comply with a number of complex procedures when dissolving a business. How a business is dissolved will also depend on whether it is an LLC, a sole proprietorship, a general partnership, or a corporation. To ensure that you take all of the steps necessary for dissolving your company correctly, please contact an experienced business law attorney who can explain your legal rights and obligations.
A sole proprietorship is a term used to describe a business entity that is owned by a single person who is legally responsible for all business-related decision making. Because they have exclusive control over their companies, sole proprietors can dissolve their businesses at any time. However, there are a few steps that business owners must still take before a company can be dissolved. For instance, businesses that have more than 100 employees must be given written notice at least two months prior to termination. The business owner must also cancel its business license and deactivate its sales tax ID number. Once the owner has made arrangements for the completion of any remaining contracts and has paid any outstanding sales tax, the business will officially be dissolved.
Dissolving a partnership is a bit more complicated, as these business entities involve at least two or more partners, all of whom are legally and financially liable for the business. To dissolve a general partnership, the partners must file a Certificate of Dissolution, which must include the reason for termination. They must then liquidate all of the company’s assets, settle debts, and notify employees, creditors, and customers of the company’s dissolution. Finally, the partners will need to distribute the remaining assets amongst themselves and pay any outstanding taxes.
Limited Liability Companies
To dissolve an LLC, the business owners must file Articles of Dissolution with the Florida Department of State’s Division of Corporations. This document must include the date of and reason for the dissolution. Once all debts have been paid, the Department will issue a Certificate of Dissolution. However, in some cases, a vote of the company’s members will be necessary to officially dissolve the company. Otherwise, all members will need to provide written consent before the company can be dissolved.
There are actually a number of ways to dissolve a corporation in Florida. If a company has not issued any shares, it can quickly be dissolved by the directors who must file Articles of Dissolution. However, if there are shareholders, a dissolution can be achieved by:
- A recommendation from the Board of Directors and a vote by shareholders; or
- Written consent of the shareholders.
Once the decision has been made to terminate the business, the Articles of Dissolution must be filed.
Call an Experienced Florida Business Law Attorney Today
Whether a company is an LLC, a general partnership, a corporation, or a sole proprietorship, owners must deal with a number of specific issues before dissolution can be achieved, including paying taxes, paying off debts, and distributing assets. To speak with an experienced business law attorney about a business dissolution, please contact Clearwater Business Law at (727) 785-5100 today.