In Florida, the owners of a limited liability company (LLC) are called members. Members often enter into an operating agreement that acts as a user’s manual for the Florida LLC and denotes the roles, authority, and responsibilities of the members as well as the procedures for the LLC. Many business owners when forming a Florida LLC do not engage an attorney to prepare a functional operating agreement or opt to not have one. So, when members start operating their business and there hasn’t been a discussion or agreement, they often wonder what is my authority when operating my Florida LLC and when do I need to get my business partner involved for day-to-day items?
Without an operating agreement, the authority of a member of a Florida LLC is governed by the default provisions set forth in the Florida Revised Limited Liability Company Act (FRLA). Without an operating agreement in place, the FRLA provides certain rules and guidelines that define the authority and powers of LLC members.
Here are some key points regarding the authority of a member in a Florida LLC without an operating agreement:
- Management: In the absence of an operating agreement, the FRLA presumes that the LLC will be member-managed, meaning all members will have equal authority to manage the company unless otherwise specified.
- Voting Rights: Each member typically has the right to vote on matters affecting the LLC. The default rule is that the voting power is in proportion to the members’ contributions to the company, unless otherwise provided in the articles of organization.
- Ordinary Course of Business: Unless restricted by the articles of organization or an operating agreement, members have the authority to take actions in the ordinary course of business without the consent or approval of other members. These actions are typically routine and necessary for the company’s day-to-day operations.
- Major Decisions: Major decisions that go beyond the ordinary course of business generally require the consent or approval of all members, unless a different voting threshold is specified in the articles of organization.
It’s important to note that while the FRLA provides default rules for LLCs without an operating agreement, it is highly recommended to have a written operating agreement in place. An operating agreement allows members to customize and define the authority, powers, and responsibilities of each member, providing clarity and avoiding potential disputes.
Roberts Law, PLLC is happy to assist business owners and can provide personalized guidance based on your specific business and relationship with your business partners.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction or the jurisdiction applicable to your issue/matter. No information contained in this post should be construed as legal advice from Roberts Law, PLLC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
