On July 1, 2015, amendments went into effect regarding Florida’s Revised Limited Liability Company Act. As the popularity of the limited liability company form, or the LLC, continues to grow, any legal changes regarding them continues to have larger and more widespread effects. Chapter 605 is the Florida Revised Limited Liability Company Act. Many subtle, and not too subtle, changes were made in the first set of amendments to the original 2013 Act, while yet other changes made were simple clarifications of questionable sections in the original Act.
One of the major areas that saw some changes under the 2015 Amendments was dissociation. Section 608.427(1) had previously prohibited withdrawal unless the Articles or Operating Agreement agreed otherwise. Moreover, Section 605.0105(3)(i) had provided that the power of dissociation could not be overridden by the LLC’s operating agreement. The 2015 Amendments deleted this item from the nonwaivable provisions of an operating agreement. If the Operating Agreement is silent as to voluntary dissociation, Sections 605.0601 and 605.0603 still provide default rules in determining whether the dissociation was wrongful, and consequently the penalties for wrongful dissociation.
Reinstatement has changed under the new provisions of Chapter 605. When Chapter 605 was originally adopted, it failed to expressly include an alternative procedure for reinstatement through filing a current annual report. Nevertheless, Florida had allowed procedure through this alternative procedure. Chapter 605 now sets forth that all fees and penalties owed by the LLC must be paid prior to reinstatement, and further sets forth the application necessary to be reinstated and the information needed.
Another major area of change under the Amendments to the Act involved the fiduciary duties owed by managers, as well as members in a member-managed LLC. Prior to the adoption of the Amendments, Section 605.04091 expressly limited the duty of loyalty and duty of care owed by these actors, while Section 605.0105 included the nonwaivable provisions of the fiduciary duties. After the Amendments were instituted, Chapter 605 no longer limited what the duty of loyalty entailed and no longer limited what the only requirements of the duty of care were. Therefore, the fiduciary duties owes to an LLC are now much more expansive than they previously were.
Considering the amount of limited liability companies now exist in Florida, staying up to date on legal developments that impacts LLCs is crucial. Considering Florida’s Revised Limited Liability Company Act went into effect in only 2013, there are plenty of amendments that are sure to ensue. Staying on top of these legal developments, and understanding their impact, is imperative. An experience business legal team can help you best understand the impact of these legal developments. Call the Trembly Law Firm at (305) 431-5678 to schedule your consultation.
