This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
A common Florida deal pattern looks like this: an asset sale closes, the wire lands, and a week later the founder asks the question every seller eventually asks — “can we shut the company down and distribute the money now?” It feels like housekeeping. It isn’t. The entity that signed the purchase agreement still owns every liability the buyer didn’t assume: the disputed vendor invoice, the slip-and-fall from last spring, the sales tax year that was never audited, the indemnity obligations in the purchase agreement itself. Florida’s Business Corporation Act contains a purpose-built machine for winding that exposure down — but it runs on a calendar with hard edges, and it interacts badly with a purchase agreement nobody read with dissolution in mind.
The entity that sold is still the entity that owes
An asset sale, by design, leaves the seller corporation intact. That’s the point of the structure — the buyer takes assets and scheduled liabilities and leaves the rest behind, subject to the doctrines that occasionally drag a buyer back in, like mere-continuation successor liability. What’s left behind doesn’t evaporate at closing. Creditors of the seller can still sue the seller, and shareholders who strip the entity bare and walk away can find distributions clawed back. Since Florida repealed its bulk sales law, there is no pre-closing creditor-notice ritual standing between the deal and the seller’s creditors; the post-closing wind-down statutes are where creditor protection actually lives now.
Section 607.1406 lets a dissolved seller force known claims to the surface
Once the corporation files articles of dissolution, section 607.1406 lets it dispose of known claims by written notice. The mechanics are precise. The notice can go out any time after the dissolution’s effective date, but no later than 270 days before the three-year anniversary of dissolution — miss that outer window and the procedure is gone. The notice must name the corporation, disclose the dissolution and its effective date, say what a claim has to contain and where to send it, and state a claim deadline at least 120 days after the claimant receives the notice. It must warn that late claims are barred, and it has to attach a copy of the statutes themselves.
Then the clock runs in the other direction. The corporation may reject a timely claim, in whole or in part, by mailing a rejection no later than the earlier of 90 days after receiving the claim or 150 days before the three-year mark. A rejected claimant has 120 days from receipt of the rejection to sue in circuit court, or the claim is barred. First the corporation flushes claims out; second it sorts them; third the courthouse door closes on anyone who received a rejection and sat on it. The statute is equally precise about what counts as a “known claim”: one that had matured by the dissolution date, or that will mature in the future solely through the passage of time. Contingent claims and claims arising from post-dissolution events are excluded — the statute won’t cut off what couldn’t yet be asserted.
Section 607.1407 handles everyone else with a four-year bar
The unknown-claim procedure is blunter. A dissolved corporation can either file a notice of dissolution with the Department of State or, within 10 days after filing articles of dissolution, publish a notice of corporate dissolution once a week for two consecutive weeks in a newspaper of general circulation in the county of its principal office. Either way, the notice announces that claims are barred unless a proceeding is commenced within four years — measured from the Department of State filing or the second publication. Four years is not short, and that’s deliberate: it’s the price of cutting off people who never got individual notice. For a seller weighing whether the wind-down is really finished, the four-year horizon also frames the housekeeping that tends to get forgotten, like the unclaimed property exposure that follows the business rather than the entity.
One housekeeping note for the majority of Florida sellers who aren’t corporations at all: the Revised LLC Act runs a parallel machine. Sections 605.0711 and 605.0712 give a dissolved limited liability company its own known-claims notice procedure and its own four-year bar for everyone else, on substantially the same architecture as the corporate statute. The playbook below translates — what changes is the section numbers on the notices, not the sequencing logic. And under either statute, claims that survive the bars remain enforceable against the dissolved entity to the extent of its undistributed assets, which is exactly why the distribution timing question matters as much as the notice mechanics.
The buyer’s indemnity and the dissolution calendar pull in opposite directions
Here’s where the corporate statute collides with the purchase agreement. The buyer negotiated survival periods — say, eighteen months for general reps, longer for fundamental and tax reps — and it expects a solvent counterparty to stand behind them. A seller that dissolves at closing and distributes everything has, from the buyer’s chair, converted its indemnity into a lawsuit against an empty shell. Sophisticated buyers see this coming and deal with it in the documents: an escrow or holdback sized to the survival period, a covenant that the seller will not dissolve or make liquidating distributions until the survival window closes, or a shareholder guarantee that survives the entity. Sellers, for their part, should read those covenants against the 607.1406 calendar before signing. If the seller promises to stay alive for two years and the known-claims notice can’t go out later than 270 days before the three-year anniversary, the sequencing still works — but only if someone diaries it. A seller that dissolves immediately, runs the notice procedure, and distributes on the strength of the bars still has to respect the claims that the procedure cannot cut off, and the purchase agreement indemnity it just gave is chief among them.
The takeaway
Florida gives a dissolved seller a real gift: a statutory mechanism to convert open-ended trailing liability into a fixed set of deadlines — 120 days for noticed claimants, four years for everyone else. But the gift has an expiration date built in, the definitions exclude exactly the contingent exposures sellers most want to shed, and none of it overrides the survival and non-dissolution covenants in the purchase agreement. The wind-down plan belongs in the deal documents, not in a phone call six months after closing. A disciplined M&A process treats dissolution as the last negotiated term of the transaction rather than an afterthought.
If you are closing an asset sale and planning what happens to the seller entity afterward, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
