Dissolving A Business

Closing a business is an important decision. A business owner or partner should seek counsel from an experienced business attorney like Matthew Fornaro to ensure that all legal issues are resolved.

That way you can use the profits, or the lessons learned, to start a new, profitable venture in the future without being weighed down by past liabilities, debts, and legal disputes.

Even a business with only one member must make sure the proper forms are filed or the owner can face ongoing personal liability for taxes or fees long after the business ceases operation.

Duties to Investors when Dissolving a Business

While many business owners are concerned with filing the proper dissolution forms with the Florida Secretary of State and the Florida Department of Revenue, business owners, officers, directors, managing members, and/or partners have duties to their investors that must not be overlooked.

Dissolving the business properly may include providing notice of the intent to dissolve and holding a meeting where the terms of the dissolution (including proposed distribution of capital and assets) can be discussed.

Asset Purchase Agreements

Sometimes, business partners, shareholders, or members can recover their investment by selling the business or significant assets of the business. An asset purchase agreement is a complicated legal transaction involving many documents and regulatory filings.

If a business name, trademark, or goodwill is included in the sale, non-compete or non-solicitation agreements can ensure the former owner doesn’t try to recover the business after the sale.

Both sides should fully understand what they are receiving from the transaction to avoid legal disputes for fraud, misrepresentation, or breach of duties.

Solutions for Mismanagement and Breach of Fiduciary Duties

Investors and limited partners place a great deal of trust on the person who actually operates a business. When the managing members, officers or directors fail to perform well or fail to explain the results of the business, the “passive” investor often has legal rights to force an accounting, a change in management, or even a dissolution of the business.

While these efforts may lead to litigation, there are initial steps at the corporate level that an investor can take to protect or recover a capital investment.

When your future and your investment are at risk, or you find yourself in litigation over the dissolution of your business, you need an attorney who can reach an amicable settlement among all parties to litigation who is knowledgeable with business structure, governance, and dissolution issues.

Attorney Matthew Fornaro has over 14 years of experience advising businesses in Coral Springs and Broward County, Florida.

He regularly counsels businesses regarding business agreements, formation, and dissolution issues. When results really matter, invest in the right choice for your business.