Florida LLC Statute: Everything You Need to Know
The Florida LLC statute was enacted in 1982. However, the number of LLCs formed was not overwhelming since the state required LLCs to be taxed as a corporation. 3 min read
2. Timeline Amendments to the Florida LLC Statute
3. New Florida LLC Statute Highlights
The Florida LLC statute was revised on May 3, 2013. The New Act (Florida Revised Limited Liability Company Act) effects new LLCs formed or registered in the state of Florida on or after January 1, 2014.
Information About the Revised LLC Act
- On January 1, 2015, the New Act repealed the existing Florida LLC.
- Until January 1, 2015, existing LLCs prior to January 1, 2014, continued to exist under the Existing LLC Act.
- The RULLCA (Revised Uniform Limited Liability Company Act) of 2006, amended in 2011, was used as the basis for revisions on the new act.
- The New Act updates the LLC law for the state of Florida, which has fallen behind by not keeping up with developments in the commercial use of limited liability companies.
- Florida's new statute includes a number of provisions from various areas within the RULLCA such as Florida's partnership acts and the ABA Revised Prototype LLC Act. The LLC acts from other states also played a role in creating the new statute.
- The statute addressed and corrected issues in the Existing Act. These included making the act clearer and easier to use for courts and its practitioners and making it more in tune with other Florida business statutes.
- With the New Act in place, Florida can remain competitive with other states, which results in the retention of LLC formations, jobs, and businesses that could go to other commercial states.
Timeline Amendments to the Florida LLC Statute
The Florida LLC statute was enacted in 1982. However, the number of LLCs formed was not overwhelming since the state required LLCs to be taxed as a corporation. This remained in effect until 1998 when the corporate income tax on LLCs was eliminated. Other changes followed.
- 1999 - The LLC Act underwent revisions, the first ones since its enactment.
- 2002 - Additional revisions were completed to clear up a variety of aspects of the LLC Act.
- 2005 - Revisions were made regarding mergers, conversions, and appraisal rights among businesses.
- 2011 - Addressed the Olmstead decision in regard to LLC membership interests and single-member LLCs.
New Florida LLC Statute Highlights
The changes in provisions from the Existing Act to the New Act were significant.
- The New Act is no different than other acts in that it is a "default" statute. This means if there is no agreement among a business's members outlined in the operating agreement, the act provides the rules.
- There are certain provisions set forth in both the Existing Act and New Act that cannot be waived by the members included in the operating agreement.
- The New Act has extended the list of non-waivable items under Florida Law.
- Under the New Act, the operating agreement cannot provide for indemnification in the case of certain types of wrongful conduct and other circumstances.
- Members and managers are given "statutory apparent authority" under the New Act.
- Unless there is a provision to the contrary included in the operating agreement or articles of organization, Florida LLCs are considered member-managed. This means the members have the authority as agents to bind the LLC.
- To make it clear as to who has the authority to bind an LLC, a statement of authority may be filed with the state.
- The way an LLC is managed has also been modified under the New Act.
- The term "managing member" has been eliminated in the new statute. Going forward, LLCs are either manager-managed or member-managed.
- Manager-managed LLCs, unless stipulated in the operating agreement, must have a majority-in-interest by the members to approve anything that goes beyond the scope of the businesses activities and affairs, such as a merger.
- Modifications were made regarding the dissolution of an LLC and the dissociation of members.
- The grounds for judicial dissolution along with the appointment of custodians or receivers have been clarified.
- The Existing Act lacked provisions for finalizing the business affairs of an LLC. This has been addressed in the New Act.
- The statute added modifications and clearer guidance regarding service of process for LLCs in Florida or foreign LLCs that have the authorization to do business in Florida.
- Provisions in the Existing Act were modified that related to appointments of special litigation committees.
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