The Florida Revised Limited Liability Company Act became effective at the start of this year — have you adjusted your LLC to meet its new guidelines? LLCs already existing as well as those newly-formed must abide by the conditions, but fortunately they can submit a retroactive application as late as January 1, 2015. If you own an LLC in the state of Florida, please do not let this information go unnoticed. Chapter 605 is the codification of the revised statute, while the prior statute was codified at Chapter 608.
Over 178,000 LLCs were created in the year 2013 in Florida, while just 102,000 for-profit corporations were created. Limited Liability Companies are popular due to several perceived benefits: flexible management structure and flexible operation, without losing limited liability, in addition to the possible tax benefits which are derived from being classified as a partnership instead of a corporation. Remember to have a business litigation attorney in Miami analyze your business in regards to this new statute because it is very complex.
Below is a summary of the more substantial changes created by the statute.
1. Indemnification Limits
The revised LLC statute expands on the limits of indemnification by identifying additional categories for which managers or members of an LLC may not receive damages. These include violations of the statutory standards of conduct as well as defalcations, or funds misappropriated by those in charge.
2. Expanded Appraisal Rights
The revised LLC statute expands appraisal rights to the areas of the sale of every asset owned by an LLC as well as interest charges.
3. Clarified Service of Process
The revised LLC statute ensures the effectiveness of a service of demand, notice or process upon a specific order of persons.
4. Non-Economic Members
Whereas prior to this statute entities and persons could only become economic members of an LLC, they can now become non-economic members of LLCs without contribution obligations, right to distributions or transferable interest.
5. Dissociation
Members of LLCs can now dissociate whenever they please but they can be held liable for damages.
6. New Member Admission
New member admission must be unanimous if not provided otherwise in the Operating Agreement — as opposed to majority vote.
7. Articles of Organization
Any conflict arising between the Articles of Organization and the Operating Agreement is settled with the latter being favored.
8. Member Duties
The Operating Agreement can remove members from their duties or move the duties to the shoulders of other members.
9. Managing Members
This now refers to an LLC managed by the manager, while those managed by members will be called member-managed.
10. Operating Agreement
This agreement can be in a record, oral, implied or a combination of the three.
Also Read:
- Explaining the New LLC Rules in Florida
- Choosing Between a Corporation and a LLC
Contact a Business Litigation Attorney in Miami Now
Do you own an LLC in Miami? Now is the time to consult with a business litigation lawyer. Why? Because The Florida Revised Limited Liability Act statute is complicated and as such requires the analysis of a professional. Changes to the statute, big and small, must be adhered to in order to properly operate an LLC in the state of Florida. Please contact the Campbell Law Group now.