LLC Owners, Be Aware and Be Prepared!
On May 3, 2013, the Florida legislature passed the new Florida Revised Limited Liability Company (“LLC”) Act. This new LLC act will be effective for every LLC formed in Florida on or after July 1, 2014 and will apply on a mandatory basis to all LLCs, including those formed earlier, as of January 1, 2015. There are some major changes in the new act that could materially affect existing LLCs and certainly need to be considered for any LLCs set up in the future. This newsletter will cover the changes the new LLC act brings and our next newsletter will cover parts of Florida LLC law that are not being changed that every LLC owner needs to keep in mind.
One of the biggest changes the new LLC act brings is the expansion from 6 to 16 “non-waivable provisions.” These are provisions that are mandatory by law and cannot be altered through the LLC operating agreement. Some of these new provisions include: 1) the ability of the LLC to sue and be sued in its own name, 2) the inability to change Florida Law as the governing law of a Florida LLC, and 3) the inability to vary the statutorily-required contents of a plan of merger, plan to acquire interest in another company, plan of conversion into another form of company, or plan of domestication to become a Florida LLC.
Another important change the new LLC act brings is the elimination of the “managing member” form of management. Under existing Florida law, Florida LLCs can have three types of management: 1) management by its members, 2) by one or more managers, or 3) by a managing member. This third category is fairly unique to Florida and the term has caused significant confusion over the years. To eliminate this confusion and make Florida’s LLC laws more similar to those of other states, the new LLC act eliminates the category of “managing member.”
These changes in the Florida LLC law are likely to have a material effect on all existing and future Florida LLCs. If you currently operate a Florida LLC or are thinking about creating one, it is important that you have your company’s operating agreements carefully reviewed by an attorney to make sure they will be in compliance with the new LLC act when it takes effect. Cramer Law would welcome the opportunity to help. We can review an existing agreement or help start a new one. Please consider contacting us for help with your Florida LLC.