In the spring of 2013, the Governor of the State of Florida signed a new Limited Liability Company Act which took effect on January 1, 2014. Until January 1, 2015, Limited Liability Company’s (LLC’s) formed in Florida before January 1, 2014 will continue to be subject to the current law under Chapter 608 unless they elect to be governed by the new law after that date. The new law will apply to all LLC’s filed after January 1, 2014. After January 1, 2015 all LLC’s must adhere to the law. Some of the important changes included in the law are as follows:
• Defines more precisely the duties of members and managers and eliminates in the process the notion of “Managing Member”;
• Gives LLC’s the ability to assign authority or restricted authority to certain persons or groups in the LLC and authorizes the filing of Statements of Authority with the Florida Department of State to such effect;
• Adds more “non-waivable rules” regarding Operating Agreements. For Example, an Operating Agreement cannot call for waiver of certain rules including member’s right to seek judicial dissolution in certain situations and prohibiting indemnity rights for certain kinds of misconduct by the person seeking indemnification;
• Adding new provisions regarding service of process on all LLC’s and creating a new section of the Florida Statutes Chapter 48 that addresses such service of process;
• Retains the Olmstead Amendment made to the LLC Act two (2) years ago;
• Clarifies the rights and duties of the transferee of a membership interest;
• Changes the voting rights of members in certain circumstances;
• Disassociated members now have the right to disassociate at any time.
However, members who disassociate may be liable to the LLC for wrongful disassociation.
• Durivative Actions. Under the new law, a member may now maintain a durivative action if the other members do not take action within a reasonable time, not to exceed ninety (90) days. Furthermore, a demand is unnecessary if demand would be either futile or irreparable injury would result in waiting for other members to take action. The new act also provides procedures for the appointment of special litigation committee to investigate any durivative actions.
There are many other sections not addressed in this article. Please do not rely only on this article for legal advice. It is meant as a brief summary of the changes in the statute. Ultimately, a review of your LLC documents is recommended in light of the new law for all Florida Limited Liability Companies. If you have any further questions or would like further details on the law, please contact Theodore J. Hamilton at extension 14 in our office.