I am a managing member of an LLC in Florida (a cosmetology salon/electrolysis facility), I own 50% of the company. We have reached a point where we have pre-sold many services that we will not be able to honor through Groupon, and also directly through us. We are contemplating closing our doors on December 21st permanently. The company owns no assets (everything from the pictures on the walls to the medical equipment is being leased) and has less than enough in the bank to even cover the payroll we owe (we have no employees, only 1099 contractors). We have been in business since Feb. 25th, 2013. My business partner says that we must pay from our personal finances to the business to cover all of the refunds that will be due before we can legally close it, but neither business partner has the financial resources to cover the refund amounts that will be due to our clients. How do we legally proceed with dissolving this business?
Hi there, thank you for your thorough response. It is immensely helpful. I would like a little more clarification on how to proceed with the dissoloution.
We formed our LLC February 25th (2013), and opened our doors on March 18th. We have run 3 separate campaigns with Groupon, starting on April 20th, May 18th, and October 13th. Total we have sold 1400 gift certificates through Groupon, each for a package of treatments totaling 1, 6, 9, or 12 treatments. We currently have redeemed 781 gift certificates, and we have been consistently redeeming them since the first one ran. We have not honored all of the treatments promised for each gift certificate redeemed. At no time during the sale of these gift certificates did my business partner and anticipate the closing of our business beyond the normal struggles for a business in its first year of operation.
A large portion of the gift certificate sales were for 6 laser hair removal treatments, and although we have consistently been redeeming those gift certificates since May (and providing at least 1 of their promised 6 treatments), we have faced numerous challenges in providing availability for laser hair removal appointments including laser malfunctions that took weeks to fix, licensed providers quitting with no notice, limited availability of a physician to be on the premises (which is a legal requirement), and other issues that have resulted in limited availability to provide these appointments. Of 680 LHR gift certificates sold we have redeemed 329, but most only for 1 or 2 treatments of 6. In addition to Groupon gift certificates, we have also sold gift certificates directly through our business for the same services. I'm not sure how many of those we have sold, but it would be significantly less.
Our supervising physician has just informed us that he will be terminating his relationship with our business as of Jan. 1st. We do not have the financial resources to employ and train a new supervising physician, and cannot legally operate without one.
In addition to the above mentioned problems, my business partner and I have decided we no longer want to be in business together. For all of these reasons, we will be closing our operation as of Dec. 21st permanently.
What are our legal obligations to our contractors, clients, and each other as we wind down and dissolve our LLC partnership?
Also, do gift certificates count as a debt, obligations, or liability in reference to Fl statute 608.445(4) (The fact that all debts, obligations, and liabilities of the limited liability company have been paid or discharged, or that adequate provision has been made therefore pursuant to s.(NNN) NNN-NNNN? And if they do, how do we go about making adequate provisions for them if we have no assets or capitol?
We do not have articles of organization or an operating agreement
Again, I appreciate your time and response, and I will be sure to rate you as excellent so that you will be paid. Thank you.
A: Probably irrelevant, in this circumstance.
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