Securities/Corporate E-lert -- Fewer than Four Months Until New Law Applies to All Florida Limited Liability Companies Formed Before January 1, 2014: Does Your Operating Agreement Need to be Amended?

With or without your consent, if you have a Florida limited liability company ("LLC") formed before January 1, 2014, your LLC will be subject to the Florida Revised Limited Liability Company Act (the "Revised Act") effective January 1, 2015.  While an LLC formed before January 1, 2014 could make an affirmative election if it wished to be subject to the Revised Act on an earlier date, beginning January 1, 2015, there is no escaping the Revised Act.  As of that date, the Revised Act will fully supersede the Florida Limited Liability Company Act, Chapter 608 of the Florida Statutes (the "Prior Act"), and the Prior Act will be repealed.

If you have a Florida LLC formed prior to January 1, 2014, it is likely that the governing documents for your LLC (for example, its operating agreement) were drafted based on the provisions of the Prior Act.  A review of your LLC's operating agreement may reveal that it contains terms that will be prohibited by the Revised Act (such as a provision that varies a member's power to dissociate (i.e., withdraw) or a provision that varies the grounds on which a member may petition for judicial dissolution), or provides for a "managing member" or "managing member," terms that under the Revised Act are ineffective in causing the LLC to be a manager-managed LLC.  You may also wish to modify your LLC's operating agreement to do one or more of the following:  (1) take into account some of the newly available procedures available under the Revised Act (such as the ability of the LLC to file or record a statement of authority describing the authority or limitation on authority of persons holding specified positions with the LLC); (2) eliminate the statutorily mandated duty to refrain from competing with the LLC in the conduct of its activities and affairs that would otherwise be imposed on managers of manager-managed LLC's and members of member-managed LLC's; or (3) eliminate mandatory obligations to make capital contributions that, pursuant to the Revised Act, can be enforced by creditors.  For information about how the Revised Act may impact your LLC and its operating agreement, please click here.

If we can be of assistance to you in reviewing your LLC's operating agreement to determine the extent to which it needs to be modified to account for changes made by the Revised Act, please contact one of our securities/corporate team members.  In addition, this may also be a good time to consider whether your LLC's operating agreement should be amended to accommodate changes in the way in which the LLC is owned or managed, or in which its business is operated, that are not now adequately addressed by its operating agreement or other governing documents.  We would be happy to assist you in that regard, as well.

John R. Kancilia
GrayRobinson, P.A.
1795 West NASA Blvd.
Melbourne, FL 32901
Phone: 321-727-8100
Fax: 321-984-4122

Lisa A. Specht
GrayRobinson, P.A.
301 East Pine Street
Suite 1400
Orlando, FL 32801
Phone: 407-843-8880
Fax: 407-244-5690