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Dissolution of a Florida
Nonprofit Corporation


ADMINISTRATIVE (INVOLUNTARY) DISSOLUTION - simply fail to file the required annual report by the May deadline and the Florida Department of State will dissolve the corporation in September - Sec. 617.1421, FS (nonprofits) or Sec. 607.1420, FS (for profits)

• Don't intentionally allow this to happen if the nonprofit owes significant debts or has on-going contracts (directors and officers might be exposed to personal liability after the dissolution takes effect.).

VOLUNTARY DISSOLUTION.

• A voluntary dissolution of a corporation is relatively easy to accomplish PROVIDED settlements can be reached with all of the known creditors of the corporation and all active contracts have been closed out.  Failure to do this can result in the directors and officers being held personally liable for corporate debts after the dissolution takes effect.


• Initiated by board of directors resolution - Sec. 617.1402, FS (nonprofits) or Sec 607.1401 (for-profits)


• Accomplished by filing Articles of Dissolution with the State - Sec. 617.1403 FS (nonprofits) or 607.1403 FS (for-profits)


• Unknown Claims:  Prudence dictates following the procedures outlined at the bottom of this page for protecting against unknown claims

IF THERE ARE UNPAID CREDITORS and settlements can not be reached and you want to force a final resolution of the debts

• If the creditors are known, reach a agreement regarding the amount that is owed and then simply make the payments (no court procedure is needed).


• If a settlement can't be reached the nonprofit can use a court procedure to force a settlement.  The nonprofit would adopt a plan for distribution of assets as spelled out in a statute. - Sec. 617.1402 (nonprofits) or Sec.607.1406 FS (for-profits)


• If there are known creditors and you want to quickly settle the amounts owed and then get judicial confirmation that the claims have been satisfied follow the procedures in Sec. 617.1408 FS, or Sec.607.1406 FS (for-profits)which are briefly summarized as follows:


• Send a notice to each known claimant (the required contents of the notice are spelled out in the above cited statute).


• The above cited statute has a procedure for paying such claims by petitioning the Circuit Court and then, after the payments have been made, having the Court enter an order stating that the claims have been satisfied.

FOR UNKNOWN CLAIMS:  follow the procedures in Sec. 617.1407, FS (for nonprofits) or Sec. 607.1407, FS (for-profits) which are summarized as follows:

• File the proscribed notice with the Florida Department of State. or
• Publish the proscribed notice in a local newspaper
• The effect of either notice is to set the time deadline for unknown creditors to file a lawsuit.

EFFECT OF DISSOLUTION - A dissolved corporation continues its corporate existence but may not conduct its affairs except to the extent appropriate to wind up and liquidate its affairs - Sec. 617.1405, FS (nonrprofits) or Sec. 607.1405, FS (for-profits)


501(c)(3) ORGANIZATIONS, upon dissolution, must distribute the net proceeds to another exempt organization. Failure to do this may result in the directors facing personal liability