Whatever the reason behind your decision to dissolve your business, it’s important to understand that it’s not as easy as just closing your business doors and moving on. There are multiple requirements under the Florida Business Corporation Act, and noncompliance can lead to serious legal consequences.
Though many business owners were fully prepared to start up their company, fewer know exactly how to dissolve a corporation in Florida. The details will vary depending on the nature and where your organization stands within a typical corporate lifecycle, so it’s wise to trust a Florida business law attorney for assistance. A general overview of the steps can also help you learn what to expect.
Determine Dissolution Requirements
If you never issued shares to stakeholders and haven’t launched operations, your plan for terminating your business is relatively straightforward. You need to complete the necessary forms to dissolve. The paperwork is available online, but you can’t submit your documents through the Division of Corporations website.
Instead, you might have to type your information into the relevant fields, and then print everything out and send it through US mail. For corporations that have issued shares and accepted funds or other items of value for an ownership interest, the requirements are different.
If people have invested in your company by purchasing shares of stock, they are owners. You couldn’t sell or otherwise cease operations without their consent, so you’ll need to notify them that you intend to dissolve your corporation. Your Articles of Incorporation and Bylaws contain the details on how to call a meeting for purposes of terminating your company, so you’ll need to strictly comply with these rules.
During the meeting, members of your board of directors need to officially bring up the issue of dissolution for a vote and recommend it to the shareholders. Then, you must get consent from a majority of the shareholders to dissolve.
In some situations involving small businesses, members of the board of directors will also be shareholders. That could make the process easier; however, it’s possible that not all stakeholders agree. Alternatively, there may be many shareholders in a larger company, further complicated the process.
“Corporate dissolution should not be seen as the first resort in solving disputes among business owners, managers, and investors. The ideal situation is for parties to engage in a negotiated settlement of their difference, so that the corporation can continue to survive.”BrewerLong Attorney Michael Long
Fill Out Dissolution Forms
Once you have agreement from all shareholders, you’re ready to fill out the necessary paperwork to wrap up your business. The form is Articles of Dissolution and, though it may seem easy, you need to fully understand the details. You must include:
- The full, legal corporate name of your company as registered with the Division of Corporations;
- The date that you originally filed your Articles of Incorporation;
- The date that you intend for your corporation’s dissolution to officially become effective, which must be within the next 90 days after filing; and,
- Some details on how your company voted to dissolve, which would typically be a corporate resolution.
If you didn’t initiate operations and never issued shares, you must supply the name and relevant dates as mentioned above. In addition, you must include an attestation, i.e., a sworn statement that:
- You have not issued any shares;
- Your company didn’t conduct any business;
- Your corporation has no outstanding debts or legal obligations; and,
- Members of the board of directors or the original incorporators agreed to dissolution.
Complete a Notice of Dissolution
Though not mandatory to dissolve your company, you may opt to prepare this notice. The document officially states that your business has ceased, which can be useful in dealing with any debts or legal obligations. If creditors contact you seeking payment, you can use this form to establish the requirements necessary to make their claims and get payment. The document also acts as official notice that creditors cannot bring any new claims for debts you’ve resolved.
Submit Materials Along with Fees
The final step in how to dissolve a corporation in Florida is sending everything into the Division of Corporations. You should include a cover letter that itemizes everything that you’re including in the packet. It’s also necessary to provide a check, along with all necessary fees – which will vary depending on the method of dissolution.
Get Legal Help from an Orlando, FL Business Law Attorney
At BrewerLong, our lawyers have decades of combined experience advising business clients throughout Central Florida. We can explain how to dissolve a corporation in Florida, and we’re prepared to help you navigate the process. To schedule a free consultation with a member of our team, please call 407.660.2964 or fill out an online contact form.