Florida Dissolution Package to Dissolve Corporation
Statutory References:
FLORIDA STATUTES, §§607.1401-607.1406
General Discussion:
I. There are two ways to dissolve a Florida corporation:
1. By the Incorporators of Directors if the corporation HAS NOT issued
any shares or has not commenced business.
2. By the vote of a majority of the shareholders of the corporation
upon recommendation of the Board of Directors or upon the written consent
of the shareholders without any action by the Board of Directors.
II. DISSOLUTION BY THE INCORPORATORS OR DIRECTORS
1. If the corporation has not issued shares or commenced business, then
that corporation may be dissolved by the Incorporators or by the Directors
by the filing of Articles of Dissolution
2. The corporation is dissolved upon the effective date of the filing
of its Articles of Dissolution (unless another date is specified).
II. DISSOLUTION BY THE BOARD OF DIRECTORS AND SHAREHOLDERS OR BY WRITTEN
CONSENT OF THE SHAREHOLDERS
1. The Board of Directors may propose to the shareholders that the corporation
be dissolved. For a proposal to dissolve to be adopted by the shareholders,
the proposal MUST be recommended by the Board. The Board may determine
that there is a conflict of interest or that other special circumstances
exist and that it should make no recommendation regarding dissolution.
In that event, the decision of the Board to make no recommendation and
the reasons for that decision should be communicated to the shareholders.
2. EVERY shareholder must be notified of a shareholder's meeting to
consider dissolving the corporation.
3. Unless the Board of Directors or the Articles of Incorporation require
a greater vote, the Resolution of the Board must be approved by a majority
of the shareholders.
4. In the alternative, the shareholders may, without action of the Board,
agree by written consent to dissolve the corporation.
5. Once the decision to dissolve the corporation has been made and approved,
then you must file Articles of Dissolution.
6. The corporation is dissolved upon the effective date of the filing
of its Articles of Dissolution (unless another date is specified).
III. EFFECT OF DISSOLUTION
1. A dissolved corporation continues its corporate existence ONLY to
wind up and liquidate its business and affairs. This process includes:
a. Collecting assets.
b. Disposing of property which will not be distributed in kind to shareholders.
c. Discharging or making provision for discharging liabilities.
d. Distributing any remaining property among shareholders;
e. Any other act necessary to wind up and liquidate the business and
affairs of the corporation.
2. Dissolution of a corporation does not:
a. Transfer title to the corporation's property;
b. Prevent transfer of the corporation's shares or securities.
c. Change the standards to which the corporation's directors or officers
are to comply.
d. Change quorum or voting requirements for the board of directors or
shareholders, provisions for selection, resignation, or removal of its
directors or officers or both, or provisions for amending its bylaws.
e. Prevent the commencement of any proceeding by or against the corporation.
f. Abate or suspend any proceeding pending by or against the corporation
on the effective date of dissolution.
g. Terminate the authority of the registered agent of the corporation.
3. As distinguished from a corporation which is not dissolved, the directors,
officers, and agents of a dissolved corporation do not incur any personal
liability by reason of their status as directors, officers, and agents
of a dissolved corporation.
IV. CLAIMS AGAINST A DISSOLVED CORPORATION
A dissolved corporation may dispose of the known claims against it by
following these procedures:
1. The dissolved corporation shall deliver to each of its known claimants
written notice of the dissolution. The written notice shall:
a. Provide a reasonable description of the claim.
b. State whether the claim is admitted or not admitted, totally or partially.
If the claim is admitted, then the notice shall state the amount admitted,
the interest obligation, if any, and
c. Provide a mailing address where a claim may be sent.
d. State a deadline, not less than 120 days after the effective date
of the notice, by which confirmation of the claim must be received.
e. State that the dissolved corporation may make distributions, after
the noticed deadline, to other claimants and/or to shareholders or other
interested persons without further notice.
2. A dissolved may totally or partially reject any claim made by a claimant.
If a claim is rejected, notice of the rejection must be mailed to the claimant
within 90 days after receipt of such claim and, in all events, at least
150 days before expiration of three years following the effective date
of dissolution
3. A dissolved corporation which wishes to dispose of claims against
must also give notice of the dissolution of the corporation to persons
with claims which are contingent, conditional, or unmatured.
4. A dissolved corporation must offer any claimant whose claim is contingent,
conditional, or unmatured such security as the corporation determines is
sufficient to provide compensation to the claimant if the claim matures.
The dissolved corporation shall deliver such offer to the claimant within
90 days after receipt of such claim and, in all events, at least 150
days before expiration of three years following the effective date of dissolution
If the claimant offered security does not reject the offer in writing within
120 days after receipt of the offer for security, the claimant is deemed
to have accepted such security as the sole source from which to satisfy
his or her claim against the corporation."
5. A dissolved corporation or successor entity which has given notice
as set out above for claims which are NOT contingent, conditional, or unmatured
claims, shall petition the circuit court in the county where the corporation's
principal office is located or was located at the effective date of dissolution
to determine the amount and form of security that will be sufficient to
provide compensation to any claimant who has rejected the offer for security
6. A dissolved corporation or successor entity which has given notice
as set out above for contingent, conditional, or unmatured claims shall
petition the circuit court in the county where the corporation's principal
office is located or was located at the effective date of dissolution to
determine the amount and form of security which will be sufficient to provide
compensation to claimants whose claims are known to the corporation but
whose identities are unknown. The court shall appoint a guardian ad litem
to represent all claimants whose identities are unknown
7. The giving of the notice or making of an offer DOES NOT revive any
claim that has been barred and it DOES NOT evidence that any claimant to
whom a notice is sent is a proper claimant. The notice IS NOT a waiver
of any defense or counterclaim with respect to any claim.
8. A dissolved corporation which follows the statutory procedures for
disposing of claims against the corporation:
a. MUST pay the claims admitted or made and not rejected.
b. MUST post the security offered and not rejected.
c. MUST post any security ordered by the circuit court.
d. MUST pay or make provision for all other obligations of the corporation.
9. If there are sufficient corporate assets, then all valid claims and
obligations shall be paid in full. Likewise, if there are provisions
to provide security for contingent, conditional, or unmatured claims, the
provision for security must be made in full if assets are available. If
there are insufficient assets, the claims and obligations are to be paid
in the order of priority. If there are claims of equal priority,
then they shall be paid pro-rata.
If, after claims have been paid and provisions for claims have been
made, and there are assets remaining, those assets may be distributed to
the shareholders. NO DISTRIBUTIONS TO SHAREHOLDERS CAN BE MADE BEFORE 150
DAYS FROM THE DATE OF THE LAST NOTICE OF REJECTIONS.
In the absence of actual fraud, the judgment of the dissolved as to
the provisions made for the payment of all obligations (except as provided
by the Circuit Court) is conclusive.
10. A dissolved corporation which has not followed the statutory procedures
regarding notice to claimants and notice of rejection of claims must make
reasonable provision to pay all claims and obligation, including contingent,
conditional, or unmatured claims. Claims shall be paid in full if assets
allow. If there are insufficient assets, the claims and obligations are
to be paid in the order of priority. If there are claims of equal
priority, then they shall be paid pro-rata. If, after claims have been
paid and provisions for claims have been made, and there are assets remaining,
those assets may be distributed to the shareholders.
11. Directors of a dissolved corporation which has complied with the
statutory procedures as set out above, are not personally liable to the
claimants of the dissolved corporation.
12. A shareholder of a dissolved corporation which has complied with
the statutory procedures as set out above is not personally liable to the
claimants of the dissolved corporation. IN AN AMOUNT IN EXCESS OF THE SHAREHOLDER'S
PRO RATA SHARE OF THE CLAIM OR THE AMOUNT, IF ANY, DISTRIBUTED TO THE SHAREHOLDER,
WHICHEVER IS LESS.
13. If a shareholder of a dissolved corporation whose assets have been
distributed pursuant to the statutory procedure regarding the various notices
to claimants is not liable for any claim against the corporation on which
is not begun prior to the expiration of 3 years following the effective
date of dissolution.
14. The aggregate liability of any shareholder of a dissolved corporation
for claims against the dissolved corporation may not exceed the amount
distributed to the shareholder in dissolution.
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