What Happens When 50/50 Owners of an LLC No Longer Want to Remain in Business Together?

Lawyer and a client shake hands after agreeing

In this case, two options are possible: (1) dissolving the LLC, or (2) transferring the interest of the LLC.

How Do I Dissolve My LLC in Florida?

To dissolve an LLC in Florida, you must file articles of dissolution for a limited liability company in accordance with Florida Statute § 605.0707.

Under Florida Statute § 605.0707(2), the articles of dissolution must include:

  • (1) the name of the LLC;
  • (2) the delayed effective date of the dissolution of the LLC, if the LLC is to dissolve on a later date than the date of filing;
  • (3) the occurrence that resulted in the dissolution of the LLC; and
  • (4) in the case that there are no members, the name, address, and signature of the appointed person to wind up the company.

The articles of dissolution will be delivered to the department and once the department finds the articles conform to law and fees are paid, the department will file the articles of dissolution and issue a certificate of dissolution. Instead of mailing these articles, they can also be filed online through Florida’s Division of Corporations’ website, Sunbiz.org. Once the articles are processed, the LLC will no longer exist. At that point, the business should only continue in order to tie up the LLC’s affairs in accordance with its operating agreement, or if there is none, in accordance with Florida Statute § 605.0707(2).

What is an Operating Agreement?

An operating agreement is a legal document that dictates how an LLC will run and operate. An LLC’s operating agreement will typically dictate how members are to sell or transfer an ownership interest in the organization or how they are to dissolve the LLC. Although Florida does not require an operating agreement to form an LLC, it is highly recommended to create one upon LLC formation. If a Florida LLC does not have an operating agreement, Florida law provides default rules that govern.

How Do I Transfer My Ownership Interest in an LLC in Florida?

There are two ways to transfer ownership interest in an LLC in Florida.

First, a member of an LLC can buy out the exiting member, known as a “partial transfer.” Usually, an operating agreement will contain a buyout provision that contains instructions on how and when to conduct a buyout. If a Florida LLC does not have an operating agreement, under Florida law, all members must expressly agree to the buyout and removal of the exiting member. Once a member is “bought out,” a new operating agreement is created by the remaining member(s).

Second, the members can conduct a complete sale of the LLC, known as a “complete transfer.” In this case, all members wish to sell their ownership interest in the LLC to a new owner. Changes in ownership of an LLC must be made public and such changes can be reported by filing Articles of Amendment or an Amended Annual Report.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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