Limited liability corporations (LLCs) were and remain an attractive option for those with entrepreneurial ideas who want to start a business. The process of starting an LLC is not as time- and money-intensive as corporations, and it features pass-through taxation. In 2014, the Florida Revised Limited Liability Company Act (FRLLCA) went into effect, and on Jan. 1, 2015, all LLCs in Florida became subject to its governance.
The law, which is officially codified as Chapter 605 of the Florida Statutes & Constitution, aimed to keep up with the contemporary commercial uses of LLCs. In addition, it has many similarities to the suggested Revised Uniform Limited Liability Company Act, which makes the law somewhat uniform to corresponding statutes in other states. The FRLLCA is a default statute, meaning that it governs LLCs unless the operating agreement specifies otherwise.
Also, the law states that an implied LLC operating agreement is valid, just as written and verbal operating agreements are. The act made it so that an operating agreement may be made by a single member.
The FRLLCA also more than doubled the number of provisions that may not be waived in a Florida LLC’s operating agreement, from six to 16. A few notable provisions are:
- The law does not allow for any LLC’s capacity to be sued under its own name to change (for particular acts of wrongful conduct)
- After a statement of authority has been filed with the state, members may have authority to bind an LLC. This goes along another non-binding provision, which states that LLCs are either member-managed or manager-managed.
- The law does not eliminate either the obligation of good faith and fair dealing or the duty of loyalty or care
- The law takes some general actions to protect and enforce the interests of members
Since the law went into effect, there have been several amendments added to it. These amendments involve dissociation (withdrawal) from the LLC, reinstatement, the fiduciary duty owed by the LLC’s managers, and more.
The goal of the FRLLCA was to make Florida a more desirable place for LLCs. Whether or not it has achieved its intended effect is subjective. What members of an LLC need to know is that the FRLLCA generally governs all aspects of the company in lieu of an operating agreement.
For this reason (and many others), it is crucial to retain the services of an experienced business law attorney who is focused on your business and its success. Bryant Taylor Law features two dedicated and accessible business lawyers; call the firm today at (954) 282-9331 to get started with a free 15-minute phone call.