What is an Operating Agreement?
In the state of Florida, the Florida LLC Operating Agreement represents an agreement between the business member of the LLC in Florida. It includes details of the companies operational and financial management. The LLC Formation Documents and Operating Agreement are different since it is not required for a Florida LLC Operating Agreement does not need to be submitted to Florida’s Secretary of State.
The purpose of the LLC (Limited Liability Company) Operating Agreement is to clearly state all of the names of the LLC member along with what their membership interest is, or what number percentage of the LLC (Limited Liability Company) each of the member(s) owns. An LLC Member interest is a way to express ownership in an LLC. Holders of membership interest have a voting and profit interest in the company. LLC Member interests may be transferred or sold to others. The LLC (Limited Liability Company) Operation Agreement also should include information on how it is managed, how profits and losses are distributed between the member(s), and how taxes will be paid by the business owner.
You might need to provide the following entities with a copy of your LLC Operating Agreements in the following situations:
Attorneys when you need legal assistance:
Potential investors and/or partners who have an interest in your business entity
Accounting and tax professionals for their financial support
A title company when you are purchasing real estate
If legal action is ever taken against the LLC owner, most likely the court will ask for a copy of the business Operating Agreement. Your Florida LLC Operating Agreement needs to be flexible so it can be changed as the needs of your business entity change and grow. Members of a Florida LLC (Limited Liability Company) use their Operating Agreement to assign managing members, in addition to detailing their responsibilities, rights, and contributions to the business.
Under Florida law, LLCs are not required to use an Operating Agreement. Florida LLC owners can instead operate their business entity as they wish, as long as they follow the imitations and requirements of the state’s business law. LLC (Limited Liability Company) members operating in the state of Florida can determine if they want an Operating Agreement that is written or oral. When there are both oral and written aspects in an Operating Agreement, any inconsistencies would rule in the favor of the written aspects. LLC member can produce their Operating Agreement either before or after they form their business.
Usually, an Operating Agreement will detail each members voting rights, the managers or manager of the Florida LLC, the shares that are held by each of the members for profit and loss purposes, the duties and powers of the members, and how members can dissolve the LLC or buy out an ownership interest. In Florida, an LLC Operating Agreement is a legal document that allows owners and, or members of any size business to detail the articles for forming their companies, an idea of how the business will operate, and other aspects that the members agree to.
Operating Agreement Forms
Whenever an LLC Operating Agreement, there are two formats that the forms are available in:
Template PDF format
Guidelines For Revising and Creating a Florida Operating Agreement
To make small changes, like updating the address of a member, or changing the registered office or registered agent, the original LLC Operating Agreement may be modified, and then a new version of your document can be saved. When changes are made to your Operating Agreement document, all of your members must sign the updated document version. The LLC should keep copies on file of all versions of their Operating Agreement as a best practice.
Before you begin to draft an LLC (Limited Liability Company) Operating Agreement, make sure to have your LLC Formation Documents on file since there is important information contained in those documents that you will need for your Operating Agreement. The information includes the formation date of the LLC, office and the registered agent name and address, the business purpose of the LLC, names, and addresses of the member, and each member ownership number percentage.
LLC Law Limitations in Florida
Laws regarding the formation and operation of an LLC in the state of Florida restrict which provisions can be included by LLC owners in their Operating Agreements. However, anything that is not regulated by law is at the discretion of the LLC members. Florida Statute Section 608.423(2) does contain a restriction which states that the LLC Operate law is not allowed to eliminate the duties of care and loyalty between business associates, restrict access to the LLC’s records, or restrict the rights of anyone who aren’t LLC members or a manager of the LLC.
If a manager(s) operates the LLC then LLC law in Florida allows an emergency Operating Agreement to be used by the company when managers are unavailable because of a catastrophe.
LLC Record-keeping Requirements in Florida
Even when an LLC is using an Operating Agreement, the business is required under Florida state laws to keep written records and documents at its registered place of business. These required records include the Articles of Organizations, financial records, and tax returns from all past years. Because LLCs provide their member’s protection from liability, it’s crucial for the members to have documentation proving the existence of the LLC. It helps preserve your limited liability status.
A Florida LLC must maintain copies of all the documents it has filed with the Secretary of State. This definitely includes articles of organization and any amendments to the articles. The state of Florida does not require an LLC to draft and file an operating agreement. However, if the LLC has drafted and adopted an operating agreement, the Business members must keep a copy of it in its records.
If the LLC has any minutes from meetings of the members or written consent obtained by the member, it should retain those documents. Any document discussing the share of profits or losses due to each member, the rights of a member to receive a distribution of funds, or each members voting rights must also be available for review.
Florida Division of Corporations website- https://dos.myflorida.com/sunbiz/