On June 14, 2013, after unanimous passage by Florida legislators, Governor Rick Scott signed the Florida Revised Limited Liability Company Act into law, providing the first major overhaul to the way LLCs do business in Florida in 14 years. LLCs formed after January 1, 2014 will be required to work under the law, which will then be extended to all Florida LLCs by January 1, 2015. However, existing LLCs can elect to adhere to the law any time after July 1, 2014.
Operators of Florida LLCs should be intimately aware of the effects of the law before the approach of these deadlines. The new act is based largely on the Revised Uniform Limited Liability Company Act, created by the Uniform Law Commission, a promoter of uniformity of laws among states. Here are some of the important changes being initiated.
Like all LLC Acts, the new one is a “default statute”, meaning LLC operating agreements may deviate from the rules unless expressly prohibited. The new act raises the list of these non-waivable provisions from six to sixteen. Included in these provisions is an increased ability to remove a member after misconduct, the ability to sue or be sued in the name of the LLC, and many others. Like before, in the absence of established guidelines put forth by an operating agreement, stipulations of the new act will become binding. Those working with an LLC should carefully examine the full extent of the new waivable and non-waivable provisions.
The new act also clears up some of the past confusion involved with “member managers” by eliminating the designation altogether. LLCs will now need to be either member-managed or manager-managed. In order to avoid issues over authority within a company, LLCs will be able to file clarifying statements with the Florida Department of State.
Overall, the new act should help to make it easier to do business in the state of Florida. LLCs will be able to designate non-economic members that have no financial stake in the company, which can be helpful when dealing with outside parties. Additionally, the new act has elements that promote foreign investment and make it easier to combine with other entities.
To be sure that your LLC’s operating agreements are in line with the Florida Revised Limited Liability Company Act, you should have them examined by experienced legal experts. Get in touch with the team at Stok, Folk and Kon, where our goal is for you to realize your objectives and secure your success.