A Florida limited liability company can dissolve in one of two ways: voluntarily or judicially. Voluntary dissolution of a Florida LLC typically includes these steps (1) member authorization, (2) filing articles of dissolution with the state, (3) winding up, and (4) filing a statement of termination. Winding up, is a period when the LLC finalizes its affairs, collects and liquidates its assets, discharges its liabilities and debts; and distributes any remaining assets to its members.
During the winding up process, an LLC must (1) discharge or make provisions for the LLC’s debts, obligations and other liabilities; (2) settle and close the LLC’s activities and affairs and; (3) marshal and distribute the assets of the LLC. See Fla. Stat. § 605.0709. In essence, an LLC can dissolve during litigation, but must follow the winding up process. However, dissolution of an LLC does not, among other things, “abate or suspend a proceeding pending by or against the limited liability company on the effective date of dissolution.” Fla. Stat. § 605.0717(1)(c).
A FL LLC can use two procedures to dispose of its known and contingent claims. One claim requires compliance with statutory notice and claim rejection procedures, but offers a shortened claims period. The second procedure requires only that an LLC pay or make reasonable provision to pay all of its known claims and obligations. See Fla. Stat. § 605.0711. A dissolved LLC that has not followed these procedures shall pay or make reasonable provision to pay all known claims and obligations, including all contingent, conditional, or unmatured claims known to the dissolved limited liability company or the successor entity and all claims that are known to the dissolved limited liability company or the successor entity but for which the identity of the claimant is unknown. If there are sufficient funds, the claims must be paid in full, and a provision made for payment must be made in full. If there are insufficient funds, the claims and obligations shall be paid or provided for according to their priority and, among claims of equal priority, ratably to the extent of funds that are legally available. Remaining funds shall be distributed to the members and transferees of the dissolved limited liability company.
Fla. Stat. 605.0711(10).
During the winding up process, an LLC “must apply its assets to discharge its obligations to creditors, including members who are creditors” first and then, if there is a surplus, to its members. Fla. Stat. 305.0710(1).
Once the winding up process has been completed, an LLC files a statement of termination with the State of Florida. The statement of termination must include the following:
- (1) The name of the limited liability company;
- (2) The date of filing of its initial articles of organization;
- (3) The date of the filing of its articles of dissolution;
- (4) The limited liability company has completed winding up its activities and affairs and has determined that it will file a statement of termination; and
- (5) Other information as determined by the authorized representative.
See Fla. Stat. 605.0709(7). Florida Department of State, Division of Corporations provides a statement of termination which can be found at http://form.sunbiz.org/pdf/cr2e141.pdf. The fee to submit a statement of termination is $25.00.
If you are seeking to dissolve your LLC or want information as to whether it would be appropriate at the time, schedule a consultation with the experienced attorneys at EPGDLaw today, located in beautiful Coral Gables. Call us at (786) 837-6787 or e-mail us to schedule a consultation.