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Florida’s New Limited Liability Company Act

Florida has a new Limited Liability Company Act (the “New LLC Act”). The Florida Revised Limited Liability Company Act is generally based on the Revised Uniform Limited Liability Company Act of 2006 (amended in 2011), which was drafted by the Uniform Law Commission and completely replaces the previous Florida Limited Liability Company Act.

The New LLC Act became effective on January 1, 2014 for all Florida LLCs that were filed on or after that date. For companies that were formed before January 1, 2014, there is a one-year transition period and the New LLC Act becomes effective for all existing Florida LLCs on January 1, 2015 (unless an election is made to apply it earlier).

Although the New LLC Act contains major differences from the current LLC Act, the members can agree to modify their rights and responsibilities in an operating agreement, as long as they don’t modify certain non-waivable provisions of the New LLC Act.

Some highlights of the New LLC Act include:

  1. Definitions. The term “managing member” is eliminated. While the term managing member caused some confusion for Florida LLCs, it is important to determine whether a Florida LLC’s governing documents provide that an LLC is managed by a “managing member.” It is important that those documents be reviewed and modified before January 1, 2015 in order to avoid a situation where an LLC is managed in a way that the members did not originally intend.
  2. Non-waivable Provisions. The list of non-waivable default rules which cannot be changed by an operating agreement was significantly expanded, such as preventing indemnification for certain types of wrongful conduct.
  3. Statement of Authority. There is a new provision which allows the LLC to provide evidence of notice of authority or restrictions on the authority of a manager or an officer.
  4. Operating Agreement. The New LLC Act provides additional ways that members can agree to establish agreements among themselves. So if the members want to make sure that their written operating agreement can only be amended in writing, the agreement needs to specifically say that.

Feel free to contact Mr. Weinstock or any of the Lewis Brisbois business attorneys to see how the New LLC Act affects your Florida LLC or your membership in a Florida LLC.

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