Single Member LLC Operating Agreement Florida: Everything You Need to Know
A single member LLC operating agreement Florida is a company whose business organization is structured by a statute that provides members of the LLC with limited liability. 3 min read
It is a legal document to be used by a sole proprietor — the single member — that establishes the ownership of the company and the basic procedures that will be used for its daily operation.
Florida Single-Member Operating Agreement: The Basics
A limited liability company does not require the same type of administrative structure and requirements as those involved with a corporation. Although a corporation offers limited liability to the corporation's shareholders, the administrative tasks and requirements exceed those of a limited liability company.
A limited liability company has flexibility when it comes to ownership. Whereas a partnership cannot be owned by one member, a limited liability company can be a single-member ownership.
Having a Florida single-member LLC operating agreement in place provides tax benefits not otherwise available.
The basis for the creation of a single-member LLC is to allow a single owner personal asset protection. Under the ownership of a single-member LLC, the owner is not held responsible for the actions of the LLC without the formalities required by a corporation.
A Florida single-member operating agreement provides protection to avoid potential losses. It does this by separating business transactions from personal transactions. Its purpose is to outline the duties, rights, obligations, and management structure of the LLC.
An operating agreement has additional benefits such as being useful when dealing with lenders or entering into business transactions.
Florida law mandates that an LLC will default to being treated as a member-managed LLC unless the operating agreement or the Articles of Organization specify it is a manager-managed LLC.
While an operating agreement for a single-member LLC is not required in Florida, without it an owner puts their personal assets at risk should the business fail, or the business is involved in litigation.
Two management structures are permitted in Florida under the Florida Limited Liability Company Act — manager-managed and member-managed. Under the Repealed Act, the concept of a managing member has been eliminated.
Under the Florida Limited Liability Company Act, a new concept referred to as "statements of authority" provide third parties with agent authority information pertaining to the business that has been filed and recorded with the Florida Department of State, Division of Corporations. The statements of authority can be created to limit or expand the agent's authority.
Statements of authority are valid for five years from its effective date or upon cancellation of the statements, or upon an amendment to the statements.
Steps in Forming a Florida Single-Member LLC
Before going through the steps of filling out the form for an operating agreement, read through it, and if there is any portion that is unclear or difficult to understand, consult with an attorney.
- Create the name for the LLC. In Florida, the name must contain one of the following: L.L.C., LLC, or Limited Liability Company. The name must be distinguishable from other registered business names.
- Use the search option on the Florida Division of Corporations website for the name you've selected for your LLC.
- To create a single-member LLC, you must file Articles of Organization with Florida's Division of Corporations. Some of the information the form requires include:
• The official name of the single-member LLC
• The principal street and mailing address
• Name of the registered agent
• Name and address information for each person authorized to manage the LLC
• Role of controlling individuals as members or managers
- Designate a registered agent as required by Florida when forming a single-member LLC. This agent can be an individual or a business entity that has agreed to accept legal paperwork on behalf of the single-member LLC. The agent must be a Florida resident, or the business designated as the agent can be a Florida business or an out-of-state business that has been authorized by the state to do business in Florida.
- File the articles online or download Form CR2E047 from the Division of Corporations website.
- Include the filing fee of $125 when filing the Articles of Organization.
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