Dissolving a Business in Tampa
How often do Tampa-area business owners make the decision to dissolve a business? According to a recent article in the Tampa Bay Business Journal, certain properties in our city, particularly in the restaurant industry, tend to be prone to business closures. Let’s take a look at a recent story about the Black Palm restaurant, “which opened in a historic building in the Jungle Prada section of western St. Petersburg in spring 2014,” and has now closed its doors.
Jungle Prada Business Closure
The story in the Tampa Bay Business Journal reported that the recent closure of the Black Palm restaurant “continues a bad run for the building at 1700 Park Street North,” as numerous businesses have opened their doors only to close months later. The historic building was constructed in the 1920s, at which time Tampa-area residents knew it as the “glamorous Jungle Prada nightclub.” In recent years, a number of business owners have attempted to get the building back into use, opening establishments such as Saffron’s and Max & Sam’s Steakhouse and Tapas Restaurant and Bar.
The owners of the Black Palm, Lui and Kathy Arango, actually closed their original location on Pass-A-Grille, where they had been in business for eight years. They chose the Jungle Prada location order to house their restaurant in a “more grandiose setting.” If the Arangos had business success for eight years before moving their business, how did their cash flow problems arise in the new setting? The problem with the building, commentators contend, is that it’s “not part of a discernable trade area.”
To be sure, the “Jungle Prada location itself is a problem.” The building is located on “a large waterfront lot along brick-paved Park Street, and is neighbor to a row of gated mansions and a park.” In other words, no other shopping areas exist right around the location. And Tyrone Square Mall offers numerous restaurant options—in addition to being a shopping destination—less than two miles away.
Learning More About Business Dissolutions
Business dissolutions can happen for many different reasons, including but not limited to:
- Disagreements between partners or owners;
- Cash flow problems;
- Stagnant business growth;
- Changes in the market;
- Loss of a particular asset; and
- Retirement or death of a partner.
In the case of the Black Palm restaurant, it looks as though cash flow problems are to blame for the closure of the business. Regardless of why you’ve made the decision to dissolve your business, there are a number of steps you’ll need to take in order to do it legally. In short, you can’t simply walk away from a business. You will have to deal with a number of legal and financial issues first.
Given that there are many different steps required to dissolve a business, you will need to speak with an experienced Tampa business attorney about your situation. In the Tampa area, business dissolutions are governed by Chapter 607 of the Florida Statutes, also known as the Florida Business Corporation Act. Since the law is extremely complex, this isn’t a process that you should attempt to handle on your own. In general, however, the following represent just some of the steps you will need to take before you can officially close your doors:
Agree to dissolve the business with the other owners. In many cases, your partnership agreement or your articles of incorporation will provide you with the terms for voting to dissolve the business.
Make a list of your final assets and inventory, which you’ll need for filing your final tax returns.
Have a business valuation completed. Although this can be expensive, it can provide you with important information for your final tax returns and for settling financial issues among the owners.
Determine a timetable for closing your business, and let your creditors and customers know that you’ll be closing your doors. After you actually close the business, you will need to cease sales and services, as well as dispose of remaining business assets and pay remaining business debts.
File your dissolution with the state of Florida. Section 607.1403 of the Florida Statutes contains articles of dissolution.
File your final tax returns. The IRS provides its own checklist for closing a business, which emphasizes the importance of working with an experienced Tampa business lawyer once you make the decision to dissolve your partnership or corporation.
These are some of the major steps you will need to take when you dissolve your business, but a dedicated Tampa business dissolution attorney can discuss other requirements with you. Contact Tampa Law Advocates, P.A. to learn more about how we can assist you.