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LLC Formation Florida: Impact of Revised Regulations

Florida is one of the US states to have kept up with the pace of modern business needs through several reforms and revisions to its LLC, Corporate, and Occupational Freedom and Opportunity Statutes. The state’s remarkable turnaround recovery since 2007 is thanks partly to these changes that are relatively important for startups and existing businesses. According to the Florida SBDC, a significant number of businesses and corporations are organized in Florida annually. For the 2.5 million small business owners in Florida, these regulations help make Florida a business-friendly state, creating an easy and stable environment for them to operate.

Florida’s LLC laws concerning the requirements for the LLC formation, registered agents, operating agreements, and annual reporting are outlined on this website, where The Really Useful Information Company (TRUiC) breaks the information down for startups.

Importance of the LLC Formation Statute

Several important things are achieved by the new act, of which the most important is modernizing the LLC law with an improved and flexible statutory model. By correcting glitches in the existing act, it becomes easier for courts to make a ruling since it is consistent with other business entity statutes of the state. Furthermore, the new formation law has led to an increase in new business formations and encourages businesses to remain in the state.

Key Points of the Statute

Some of the key points contributing to easier LLC formations include that forming the LLC and delivering articles of organization can now be done by one or more authorized persons. Other changes include that the articles of organization must include a name that complies with s. 605.0122. of the law, and all the details of the business’ street and mailing address must be provided. The same applies to the details of the company’s registered agent.

The law added several default provisions to the articles of organization, but these are minimal, meaning that the LLC agreement has the power to control most of the rights and responsibilities of the LLC members.

If members fail to address some important issues in their operating agreement, the many provisions of the new act will apply. Put more simply, the operating agreement of an LLC can still override the default provisions of the new act, unless those are specified in the act as “nonwaivable.” 

Key provisions for the Articles of Organization

Statements in the articles of organization cannot vary or be inconsistent with the provisions provided in s. 605.0105 (3), but can differ from those required under subsection.

In the additional statements, members can include if the LLC is manager-managed according to the provisions.  If manager-managed, the limited liability company must provide the names and addresses of the managers. The same applies to a member-managed LLC.

All other relevant matters need to be disclosed, including descriptions of the authority or limitation on the authority of specific people in the company. This includes any person with a specified status or holding a position.

A limited liability company can only be formed when its articles of organization become effective under s. 605.0207 with at least one person as a member. That person signs the articles of organization affirming the company has at least one member at that point.

 Key Provisions for Registered Agents

When a legal summons to a lawsuit is sent to an LLC, the registered agent is there to accept the service of process. A Florida registered agent requires must maintain an office with a physical address and not a P.O. Box.

The information of the registered agent information is provided with the LLC filing and is kept on file by the State of Florida. Any changes of a registered agent must be registered with the state.  

 Key Provisions for Creating an Operating Agreement

With the operating agreement, the LLC owners create the terms of how they operate their startup. These provisions are limited by the state law where some matters are concerned, but in others, it makes it easier to resolve disagreements.

Important things to include in an operating agreement: member responsibilities, the admittance of new members, membership transferals and terminations, distribution of profits and dividends, and provisions about future amendments to the agreement.

Key Provisions for Annual Reporting

Finally, one of the most important areas for keeping a business compliant is the annual report of the LLC to the state. The report includes the name, address, date of organization, EIN, manager or member details, and any other additional information of the LLC. Also, if the registered agent has changed from the previous report, the state considers this to be a notice of the change.

In Florida, annual reports are due from January 1 to May 1. For a new business, the first annual report is only due the following calendar year after formation.

Businesses failing to file an annual report are notified and given 30 days to respond. If the business doesn’t respond it faces dissolution.

Final take away

Florida’s revised LLC company act has cleared some of the confusion created by the previous statute concerning the wording around the manager and member. It now offers more clarity on how an LLC is managed and who has authority.