Key Points of the New Florida LLC Act

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The 2013 Florida Legislature adopted a new LLC act which was signed by the Governor on June 14, 2013. The new law creates Chapter 605 of the Florida Statutes, which will be effective January 1, 2014. Generally speaking, until January 1, 2015, LLCs formed in Florida before January 1, 2014 will continue to be subject to current law (Chapter 608), unless they elect to be governed by the new law earlier than 2015. In addition, all records filed on or after January 1, 2014 with the Department of State by a Florida or foreign LLC must comply with the filing requirements of the new law. On January 1, 2015, all LLCs must adhere to the new law.

The new law is based for the most part on the Revised Uniform Limited Liability Company Act (2006, as amended in 2011), but retains many existing Florida LLC statute provisions or concepts and incorporates concepts from other sources, including the Florida corporation statute, the American Bar Association’s Prototype LLC Act and the business entity laws of other states.The new law strikes a balance between a “minimal” intrusion (or complete “freedom of contract”) approach like that of Delaware, a more paternalistic approach that protects persons who may be less knowledgeable about the law and issues affecting LLCs. The new law will remain a “default statute,” which means that except for the 17 "nonwaivable" provisions (listed in new Section 605.0105), the members may override the statutory default rules by their operating agreement. Thus, the operating agreement remains the focal point for examination of the rights and responsibilities among the members, and as a result, careful drafting of the operating agreement remains essential for any LLC, including single-member LLCs.

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Topics:  Limited Liability Companies, LLC

Published In: Business Organization Updates, General Business Updates

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.

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