Perhaps you're simply tired of business or you're considering another avenue. Maybe you've found another passion and it just doesn't align with the business that you've already built. Florida Corporations come and go all of the time, often appearing and disappearing (on small scale corporations) within a few years. Business changes with every passing day, so this should be of little surprise to anyone who finds themselves in the business world.
No matter what your reason, we're here to help make this as painless as possible. Thankfully, Florida makes the process sweet and simple. Let's dive on in.
Differences between Corporation and LLC Dissolving
The largest differences are in semantics. We'll get to fees and forms, but there is little difference between them. Florida does not require you to have a tax clearance to dissolve your business, as many states do. However, we do recommend that you file your tax clearance forms as soon as the last financial documentation is ready. It makes the entire process far simpler and assures that you won't run into issues the next time the tax man comes to call.
With LLC dissolving, the business name is held by the State of Florida for 1 year. That is the same with corporate dissolution as well, with the caveat that corporate entities may simply discard their request for dissolving within 120 days of receiving an answer on their submission. This means that if you are able or willing (or both) to take up the reins again within a few months, you can do so with little penalty other than time.
This is also a wonderful way to take a little time to step back, restructure, and reconsider the current path of your company. It can give a failing corporation time to seek help or even to look for investors. Yes, you can use dissolving as a way to put your business world on hold. Corporations do it all the time, though we recommend a lawyer's advice if you intend to do it this way and do not advise corporations to do this.
Fees and Forms
To simply dissolve your corporation, your fee is $35 plus the filing of the dissolution forms. You'll need to file for tax clearance and finish up your financial filings overall to be able to close your books. Once you have been contacted and told that your business has been dissolved, you need only finish the material dissolution: liquidizing your assets and so forth.
However, if you decide to disappear, be aware that Florida has steep fees for those who do not dissolve their corporation. Your annual report is due on May 1st to the tune of $150 for the filing fee. If you are late, these fees can increase to a near $1,000 fee total by May 2nd. Your reinstatement fees are nearly half of this.
Though we realize that it may seem easier to get up and walk away from a business, especially if the corporation is failing or combative, it is much better to file your dissolution paperwork. Again, you can spend the next few months considering if you desire to restructure or if you want to let sleeping dogs lie. And we realize that this decision is entirely up to you, but we do want to remind you that a mere $35 fee to dissolve your business is much preferable to a $600 reinstatement fee, a $300 late fee, and a $150 filing fee for your annual reports.
In the End
Take care of yourself and any intellectual property maintained by the corporation. Place your copyrights and your patents before you begin dissolution. Remember, if the company owns it then the company is the one who has their hands on it; not you. This means even after dissolution; you will not own those rights unless stated throughout a contract.
Protect your interests when you fold your Corporation if it is possible to do so. We recommend speaking with a copyright lawyer as soon as you give notification of intention to dissolve the company. It is, after all, possible for others to pick up your company name and essentially steal your identity if your IPs are unresolved or still waiting to be patented by a person; not just the company they intend to create under your old name.
Several issues like this have popped up throughout the years, especially in the Central Florida area which is so rife with IPs. Do what is best for yours, and note the process is the same when dissolving a Florida S-Corp.