What is a Limited Liability Company (LLC)
A limited liability company or LLC is a Florida business structure that allows owners to create a separate legal entity. The formation also limits liability for the business to the entity. Therefore, under this structure, the entity’s owners (members) cannot be held personally liable for the LLCs actions.
What Happens During an LLC Dissolution?
Dissolving a Florida LLC typically involves member discussion and decision-making, attending to any outstanding debts or obligations, filing the articles of dissolution, and winding up the entity’s affairs.
What Events May Cause an LLC to Dissolve?
Florida LLCs are typically governed by operating agreements. Although these contracts are not legally required, they are highly recommended. The operating agreement is a contract between the LLC members (owners) that sets out how the entity will be managed and run. When a Florida LLC has an operating agreement, the document usually includes terms detailing how dissolution will occur. If an entity does not have an operating agreement, Florida law will govern dissolution.
Under the law, LLC dissolution is generally permitted under the following conditions:
- The members unanimously consent
- The passage of 90 consecutive days during which the company has no members.
- A court enters a decree of judicial dissolution,
- The Florida Department of Commerce files a statement of administrative dissolution,
When a triggering event occurs, the dissolution process for the Florida LLC will begin.
Attending to the LLC Obligations and Debts
When an LLC is preparing to close its operations, it will need to assess its obligations and take steps to resolve them. This will involve paying creditors and any applicable taxes. When an LLC is dissolved, the entity must also distribute payments and assets to members according to the law. Florida law has specific requirements for LLC asset distribution.
The best way to ensure that you comply with the law during this phase of LLC dissolution is by working with an experienced Florida business attorney. Your business lawyer can help you evaluate your outstanding obligations and help ensure that you comply with these requirements during your LLC’s dissolution process.
Dividing Surplus During LLC Dissolution
After an LLC pays its debts, any surplus must be distributed in the following order,
If the LLC does not have sufficient surplus to repay contributing members, any surplus must be distributed among the owners in proportion to the value of their respective unreturned contributions.
Florida LLC Articles of Dissolution
Once all assets are appropriately distributed, the Florida LLC will need to file articles of dissolution with the Florida Department of Commerce. However, filing these documents can be complex, and it is important to work with an experienced Florida business attorney during this and other phases of the dissolution process.
Contact an Experienced Florida Business Attorney
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent small business clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.