Closing a Business in Florida: What You Need to Know

Starting a business is exciting. But the reality is that not every business will last forever. According to data from the U.S. Small Business Administration, about one-third of new businesses with employees close within the first two years. And while some businesses fail for financial reasons, many others close for personal reasons—such as retirement, health concerns, or the owner simply deciding to pursue a new opportunity.

Whatever the reason, when the doors close, the business entity itself does not automatically disappear. A Florida corporation or limited liability company (LLC) must be properly dissolved under Florida law to ensure that debts are paid, assets are distributed, and owners are protected from future claims.

Dissolving a Florida Corporation

Florida law sets out a clear process for winding up a corporation. Under Florida Statute §607.1401, a corporation may dissolve voluntarily by the action of its directors and shareholders. Once that decision is made, the corporation must file Articles of Dissolution with the Florida Department of State.

From there, the corporation continues to exist for the limited purpose of winding up its affairs. As provided under Florida Statute §607.1405, this includes collecting assets, disposing of property, paying debts, and distributing any remaining funds or property to shareholders.

It is also important to notify creditors and resolve any outstanding obligations. This not only protects the business’s reputation but also shields shareholders and directors from unnecessary liability.

Dissolving a Florida LLC

LLCs follow a similar process, though with their own set of rules. Under Florida Statute §605.0702, an LLC may dissolve when its members vote to do so in accordance with the operating agreement, or by filing Articles of Dissolution with the Department of State.

Once dissolved, an LLC must wind up its activities as outlined in Florida Statute §605.0710. This includes paying or making provisions for debts, obligations, and liabilities; distributing remaining assets to members; and filing any final tax documents.

Like corporations, LLCs also continue to exist for the purpose of winding up, even after the formal decision to dissolve.

Why Proper Dissolution Matters

Many business owners assume that once they close their doors and stop operating, the business is finished. But without properly dissolving the entity, the business may remain legally active. This means it could continue to accrue annual report fees, taxes, and penalties with the State of Florida. In addition, creditors could still attempt to bring claims against the entity.

Failure to dissolve properly can create headaches long after a business is closed. Taking the right steps ensures that obligations are met, records are clear, and owners can move forward without lingering liability.

Preparing for the Future

While business closure may feel like the end of the road, it is often the beginning of something new. Many Florida entrepreneurs close one business only to launch another, apply their lessons learned, and continue innovating. But before moving on, it is critical to ensure that the business being left behind is wrapped up legally and financially.

At The Soto Law Office, we help business owners throughout Central Florida with every stage of the business lifecycle—from formation and contract drafting to dissolution and winding up. We know the process can feel overwhelming, especially when emotions are high and financial stakes are involved. Our role is to guide you through the legal requirements, protect your interests, and make sure your business closure is handled properly.

If you are considering closing your Florida business, don’t leave loose ends that could come back to create problems. Our team at The Soto Law Office can help you file the necessary documents, handle creditor notices, and ensure your business is dissolved in compliance with Florida law.

Call us today at (321) 972-2279 or visit us at www.TheSotoLawOffice.com to schedule a consultation. Let us help you close this chapter with confidence and prepare for the next opportunity ahead.