Florida Adopts New Limited Liability Company Act

by Fowler White Burnett, P.A.
Contact

The Florida Legislature has adopted the Florida Revised Limited Liability Company Act (“New LLC Act”) which substantially revises Florida’s prior LLC Act.  These revisions to the law have a broad impact on Limited Liability Companies (“LLCs”) in Florida, include changes that could affect members’ and/or managers’ liability, and may impact which individuals or positions within an LLC have apparent authority to legally bind the entity.  The New LLC Act also affects how an LLC’s operating agreement may be enforced or interpreted.  We recommend you consult with your legal advisors to determine how the New LLC Act may affect your LLC and its operating agreement.

The New LLC Act is currently effective for all LLCs formed or registered to do business in Florida on or after January 1st, 2014 and for all records filed with the Florida Division of Corporations regardless of when an LLC was formed or registered to do business in Florida.  Florida LLCs in existence or registered to do business in Florida before January 1st, 2014 are governed by the prior statute for the remainder of 2014 and will be governed by the New LLC Act effective January 1st, 2015.  Therefore, both newly established and existing LLCs are affected by the legislation.

Like the prior LLC Act, the New LLC Act is a default statue and many new default provisions relating to matters which are not addressed in an LLC’s operating agreement have been added to the New LLC Act.  Some of the more significant changes in LLC law created by the New LLC Act include:

  • Eliminating the concept in Florida’s prior LLC law whereby an LLC could be managed by one or more “managing members.”  The other two (2) management structures under the prior LLC law which allow for the LLC to be managed by its members or managed by its managers remain in the New LLC Act.  Under the New LLC Act, an LLC that is managed by a “managing member” will be deemed a member-managed LLC effective January 1st, 2015, subjecting management decisions to a vote of all members and potentially creating apparent authority to legally bind the LLC in all its members.  If this result due to the change in the law is not intended by an existing LLC with a “managing member” structure, the LLC should be converted under the New LLC Act to a manager-managed LLC.
  • Revising the default or implied rules for apportioning distributions, profits and/or losses and member voting rights.
  • Permitting non-economic members (members with no economic interests in the LLC).
  • Enumerating statutory provisions which cannot be waived in the LLC’s operating agreement and permitting some common operating agreement provisions only if the provisions “are not manifestly unreasonable” under the law.
  • Creating the ability to provide constructive notice to third parties regarding the authority, or limitation of authority, of a position in the LLC or of one or more individuals to legally bind the LLC by filing a Statement of Authority (“SOA”) with the Division of Corporations.  A person granted authority in an SOA may subsequently deny that authority by filing a statement of denial with the Florida Department of State.
  • Imposing obligations on members of a member-managed LLC and managers of a manager-managed LLC to maintain the accuracy of information filed with the Division of Corporations.

We have only listed in brief summary fashion some of the significant changes to prior law created by the New LLC Act.  The New LLC Act contains forty-two (42) new definitions not in the previous LLC Act and amends numerous existing definitions.  Because the New LLC Act affects all LLCs doing business in Florida, readers should consult their legal advisors to understand the impact of this legislation on themselves and their businesses and to determine whether amendments to their operating agreement or articles of organization are necessary to avoid unintended consequences. 

Further, third parties doing business with LLCs in Florida (including lenders) should consider any changes that may occur with respect to their contractual or business arrangements with LLCs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fowler White Burnett, P.A. | Attorney Advertising

Written by:

Fowler White Burnett, P.A.
Contact
more
less

Fowler White Burnett, P.A. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.