LLC operating agreement in Florida" width="900" height="200" />Methodology
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If you're running an LLC in Florida, you must have an operating agreement for business and legal reasons.
To help you familiarize yourself with drafting an operating agreement, we teamed up with our seasoned attorneys, boasting decades of experience in the LLC sector. We also spent three weeks researching intricate components of a Florida operating agreement and why you need one.
This article brings you everything you need about a Florida LLC operating agreement.
Disclaimer: This template is offered for informational purposes only and is not intended as legal advice. We highly advise consulting a qualified attorney to confirm its suitability and accuracy for your specific needs. We assume no responsibility for any consequences arising from the use of this template.
We recommend reading our comprehensive article on the essential differences between member-managed and manager-managed LLCs before downloading our template.
LLC operating agreement in Florida" width="900" height="200" />
A Florida LLC operating agreement is a legal document that regulates the internal operations of an LLC created to meet the specific needs of the company members.
It outlines the agreement terms between LLC members, their obligations, financial assets, and ownership structure.
The different types of Florida LLC operating agreements include:
To write a Florida operating agreement, you must have all your company details, including LLC basic information, member's information, and LLC organization, or consult a business lawyer.
Here are the steps you'll need to take to draft an operating agreement in Florida:
You should define the ownership structure as a first step in writing an operating agreement. LLCs can set their ownership structures depending on membership interest or equal say.
Each class of ownership percentage may grant members varying corporate voting rights with each interest described in your LLC’s operating agreement.
The agreement should also specify how the profits and losses of the company will be distributed among the members under the ownership structure.
The next step is to specify how your LLC will be run.
In Florida, choosing between a member-managed and a manager-managed LLC is necessary:
In addition to the management, your operating agreement may stipulate the duties, responsibilities, and restrictions imposed on said management.
Members of an LLC created in Florida automatically owe loyalty and care to one another under fiduciary obligations.
They must, therefore, behave in the organization's and their fellow members' best interests.
This step is a crucial section of your Florida operating agreement if any internal conflict results in legal action.
Further, the provision should state that managers have a right to get paid for their work. Compensation made out of pocket for LLC expenses by members or managers must be repaid.
You can simultaneously recruit a new member for your LLC or fire an existing one. Again, the provisions for such must be included in your operating agreement.
It's essential to provide clauses for dissolution because you might choose to dissolve your LLC at some point.
Your LLC's operating agreement should include this scenario and how other members might be affected:
You should also set a severability clause. This provision enables you to eliminate sections declared unconstitutional, illegal, or unenforceable by a court decision without altering the other terms of the operating agreement.
This clause is crucial given that your agreement gives you the right to disregard Florida law.
You need an LLC operating agreement in Florida to maintain corporate formalities, including ownership, operations, and status.
According to the Florida State Law Statute, a Florida limited liability company may take up an operating agreement; however, the Florida Department of State does not require it to do so.
We recommend having one for several reasons:
An operating agreement includes clauses of ownership for the LLC. The LLC owners usually use such clauses to prove their ownership.
Additionally, most banks will ask for a copy of the Florida LLC operating agreement when creating a business account to show the owners.
This requirement's goals are to demonstrate the LLC's legitimacy and state acceptance and display the list of owners and their ownership stakes in the company.
The primary intent of forming a Florida LLC is to offer limited liability protection for its owners/members.
A properly drafted operating agreement helps define the necessary asset division between the business entity and its members.
This legal document reinforces the limited liability protection provided by a Florida LLC entity and prevents any ambiguity regarding the members' personal assets and the LLC's assets.
An operating agreement will establish standard operating procedures that outline how decisions are made, how meetings are held, and other key company practices.
Because of this, day-to-day operations may operate more smoothly, and members may find it simpler to learn how to conduct business.
Furthermore, it may help ensure that everyone connected to the LLC knows their responsibilities.
Intricacies of the LLC itself, including accounting practices, required capital contributions from members, allocation of members' profits and losses, asset distribution, and dissolution processes, are all covered by an LLC operating agreement.
Due to their clarity and ability to serve as a solid foundation, these provisions are vital to single- and multi-member organizations.
The Florida Revised Limited Liability Company Act's default rules and regulations apply to every LLC without its own operating agreement [1].
The Florida LLC Act fails to solve typical problems, including buyouts, capital contributions, and informal deadlock resolutions while giving members in majority control a great deal of authority.
Relying on the LLC statute also raises the likelihood of litigation because there are no alternative ways for members to settle disagreements without going to court.
Members can manage LLCs without relying on the Florida LLC Act's default guidelines by having an operating agreement in place.
"The Florida law assumes that LLC members have better knowledge of their business than the state, leading them to draft an operating agreement."
- Jeramie Fortenberry, Attorney
Does Florida Require an Operating Agreement for LLCs?
No, Florida does not require an operating agreement for LLCs. But, having one is a smart business decision as the agreement sets rules for the LLC, protecting its status and ownership.
Does an Operating Agreement Need to Be Notarized in Florida?
No, an operating agreement does not need to be notarized in Florida. However, the agreement may be notarized if members and owners of the LLC want the agreement to go on public record.
Does a Florida Multi-Member LLC Need an Operating Agreement?
Yes, a Florida multi-member LLC needs an operating agreement. This is because an operating agreement details a member's responsibility, duties, compensation, contributions, and distribution of profits and losses.
