Some corporations and companies last for decades, while others may only operate for a few months or years. Not every business is meant to last forever. An entity may close because its owner needs to move on to other opportunities or for personal financial reasons. Whatever the reason, deciding to close your Florida business is an important decision that should be weighed carefully. In this situation, you will need to know: Is it time to dissolve my Florida corporation?
Reasons to Dissolve a Florida Corporation or Company
When you established your Florida corporation, you may have planned for your entity to last in perpetuity. However, circumstances change, and it may be time for you to dissolve the enterprise and move on.
Some of the reasons to dissolve a Florida corporation may include:
- Lack of profitability
- Conflict Between Shareholders
- Changes in Shareholder Interests
- Legal Issues
- Personal Reasons
- New Opportunities
Ending a Florida Corporation
When shareholders or members determine that it is time to close a corporation or LLC, there are two main components of the process:
- Dissolving the Corporation or LLC, and
- Winding up its Affairs.
In Florida, corporations must file documentation to attain dissolution. However, the necessary dissolution steps will depend on certain factors.
Dissolving the Corporation
Dissolving a corporation legally ends its existence as a registered entity in Florida. Under the Florida Business Corporations Act (BCA), a corporation’s board of directors may propose dissolution for submission to the shareholders by first adopting a resolution authorizing the dissolution. Then, the board of directors will present the proposal to dissolve to the shareholders before their meeting.
To be adopted, a voluntary dissolution must be approved by shareholders through a vote at a shareholder meeting. Unless the articles of incorporation or the board of directors require a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by a majority of all the votes entitled to be cast on the proposal to dissolve. Alternatively, without the action of the board of directors, action to dissolve a corporation may be taken with the written consent of the shareholders. If the corporation has not issued any shares, the board of directors or a majority of incorporators can approve the dissolution.
Once there is approval, the entity can file the corporation’s articles of dissolution with the Florida Division of Corporations (DOC). The articles of dissolution must include:
- The corporation’s name,
- The date the corporation was formed, and
- The date of dissolution was approved by the shareholders or directors.
Filing the articles of dissolution is an essential part of the process, and it would be in your best interest to work with an experienced Florida business attorney.
Winding up the Corporation’s Affairs
Generally, “Winding up” is a term that means handling any outstanding financial issues. Winding corporate and corporate tasks typically include collecting and organizing assets, paying outstanding debts, collecting accounts payable, and distributing remaining assets to shareholders. In addition, both types of entities will be required to file articles of dissolution.
When corporations, partnerships, or LLCs are dissolved, numerous other tasks must be completed. If you believe your entity needs to be dissolved, you should contact an experienced Florida business attorney to discuss the various requirements.
Contact an Experienced Florida Business Attorney
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with commercial leasing, 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 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.