This article discusses some of the basic aspects of a Florida limited liability company, or LLC. If you’re starting a new business, one of the most attractive legal entities to use as the vehicle to manage and operate your business is the LLC. A number of benefits are available to the owner, including flexibility of management and capital structuring, limited liability protection, tax benefits, and more. Take into consideration some of the matters we discuss below about the Florida LLC.
LLC’s are essentially governed by statute and the internal documents of the entity. Typically those documents are the articles of organization and the operating agreement. The law which governs LLC’s is the new Florida Revised Limited Liability Company Act under Chapter 605, Florida Statutes (the “LLC Act”). Any LLC created after January 1, 2014 is governed by the new LLC Act and its statutory provisions.
The first thing to consider is forming your LLC. Formation is accomplished by filing “articles of organization” with the Florida Department of State, Division of Corporations. You can do the filing on your own, but it is probably better to have an attorney handle the filing because there can be important legal consequences to the filing of your entity and you will want to get it done right. The law requires the LLC to have at least one member for its formation. The act of formation can be done by the member or the LLC’s authorized representative. With respect to its management structure, the LLC is either managed by its members or a manager or managers. In general, smaller LLC’s will be directly managed by their members, or one of the members will serve as the designated manager. An LLC is presumed to be “member-managed” unless the company’s governing documents state otherwise.
A person who becomes a member of the company typically makes a “contribution” of capital to the LLC. A contribution is usually an investment of money or property into the LLC. However, a person can be a member of the company without making a contribution of money or property to the LLC.
The most important document affecting the LLC is the operating agreement. This is the document which essentially governs the affairs of the company and manages the relations between and among the members and the LLC. The law does not require you to have an operating agreement, and if you are a one-member LLC you really can do without one. But if your LLC has multiple members the need for an operating agreement becomes much more compelling. Since disputes can easily arise between members over management, contributions, distributions, profit sharing, transfers of membership interests, etc., the operating agreement will function to clarify these matters and help avoid conflict. The company itself, and the members and managers are bound by the terms of the operating agreement.
If you want to incorporate your own Florida limited liability company or “S” corporation, please feel free to contact us for assistance. We can assist with all the paperwork necessary to get your business up and running.
