What are Florida LLC Operating Agreements?

DISCLAIMER: The Following is not legal advice, it is for informational purposes only.   If you have a legal issue, please consult your own attorney.  

Today I want to talk to you about an LLC. A lot of people have heard the term LLC. What is that mean? It means a limited liability company and one of the special features of a limited liability company is that the parties that are becoming partners essentially draft what is called an operating agreement, and that operating agreement is like a constitution for the company.

LLC Formation provides for things related to ownership interest or membership interest like who has the authority to hire a manager? Who has the authority to bring on another partner? How does the company take on debt? How does it divvy up into shares at the end of the day? How this would happen if something happens and there’s a decision to dissolve the company? What happens if one of the members dies? These are all provided for in this agreement.

In Florida, LLCs are governed by a statute, and many of the LLC operating agreements have some standard language in it relative to these particular components which are who are the managing members of the LLC? What powers do they have? How much interest do they have?

Most importantly, when do you get paid from the distributions of profits and you know, what happens in the scenario that the business fails because, in a lot of time businesses, they take on debts, there are personal guarantees, there is a lot of things that go into a question about debt and operations. You know also about like it, you know, it could even have things about expansion who is going to be the accountant, who is going to be the attorney, and what the respective roles day-to-day roles of the members are. A lot of times in an LLC that I have seen some of the members are the what I call money members which are the members that provide the investment capital into the LLC and then you have the operational people that do just that they operate the company they manage the company and they are responsible for everything from opening the shop in the morning to hiring employees and making sure that the business operation operations run smoothly. But the LLC operating agreement itself is a powerful tool because right up front when you are starting the company you get to decide how things go down. You get to decide who has certain rights, and who does not, who is in who is out, and even under what circumstances can a couple of the members get rid of somebody that is just not working out. That power to decide is something that makes the LLC operating agreement extremely attractive to people that are starting businesses.

Again, I’m Attorney Jay Farrow, and if you found this to be informative follow us on Facebook or Instagram, or on Twitter.