- Florida’s Revised LLC Act Impacts All Florida Limited Liability Companies
- April 24, 2015 | Author: Jonathan E. Kanov
- Law Firm: Marshall Dennehey Warner Coleman & Goggin, P.C. - Fort Lauderdale Office
- Effective January 1, 2015, the Florida Revised Limited Liability Company Act (Revised Act) applies to all Florida limited liability companies, regardless of when they were formed, and the former Act (codified in Chapter 608 of the Florida Statutes) was repealed. The Florida Legislature adopted a complete rewrite of the statutory framework during its 2013 session and delayed full implementation until this year. The Revised Act represents a substantial evolution in Florida law and has been codified in Chapter 605 of the Florida Statutes.
Important changes include, but are not limited to: (1) elimination of the concept of managing member; (2) modified rules for derivative actions; (3) an expanded list of fiduciary duties and management rules that cannot be overridden by the operating agreement; (4) changes to LLC governance, including new member voting rules; (5) expanded categories for which indemnification of members and managers is prohibited; and (6) expanded safe harbor for approving conflict-of-interest transactions.
The “managing member” concept often led to confusion as to whether the LLC was managed by a member or manager. Now, the Revised Act holds that the LLC must be either manager-managed or member-managed, with existing LLCs using managing members deemed to be member-managed. To avoid this presumption, the operating agreement or the articles of an organization must provide that the company will be manager-managed. There are many legal implications based on how the LLC is managed, including who has authority to bind the LLC. Also, the Revised Act continues the use of the charging order as the sole and exclusive remedy of a judgment creditor of a member of a multimember LLC seeking to levy against the member’s LLC interest.