File a Limited Liability Company in Florida

Just as shareholders of a corporation are protected from corporate liabilities, the owners or “members” of a limited liability company are generally not personally liable for the debts of the business, and a member’s financial risk is limited to the amount of his or her investment.  Unlike a corporation, however, the income and losses of a limited liability company are not attributed to the company, but instead flow through to the members, avoiding the double-taxation encountered by corporations.

A Florida limited liability company is created by filing articles of organization with the Secretary of State.  The articles are filed by the company’s organizer or organizers, who can be, but are not required to be, members of the company.  In addition to articles of organization, Florida statute requires all limited liability companies to have an operating agreement.

The operating agreement is an internal document (it is not filed with the Secretary of State or any other government agency) that establishes the rules and regulations for the conduct of the company’s business and affairs, and the rights, powers and duties of the company’s members, managers and employees.  An operating agreement often addresses whether the company is member-managed or manager-managed and will also address, among other things:

  1. The classes or groups of members and their rights and benefits;
  2. Voting structure for company decisions;
  3. Restrictions on transfer of membership interests;
  4. Allocation of income and losses among the members; and
  5. Tax elections for the company.

A limited liability company is either managed by its members or a specifically appointed manager or managers.  The person or people vested with management responsibility have the right and authority to manage the affairs and business of the company, limited only by the operating agreement or Florida statutes.  If the members choose a manager or managers, they do so in an operating agreement, which might also include the parameters of a manager’s authority.  Managers do not have to be members of the company.  It should be noted that under Florida statute, members of a member-managed company are liable for all state taxes to be paid by the company.  If the company has a manager or managers, they are liable for such taxes.

Although the management structure of a limited liability company may have the added complexity of being manager-managed, a limited liability company generally involves much less in the way of business formalities than does a corporation.  A limited liability company is not required to hold annual meetings of members or managers, is not required to keep minutes of any particular meeting, does not have to issue certificates evidencing equity ownership, and does not have to elect officers or directors.

Limited liability companies also do not have to file annual reports with the Secretary of State.  Membership interests are also freely transferable.  Further, while Missouri corporation law imposes certain obligations on a corporation’s directors and officers in the performance of their duties, the limited liability company statutes provide increased flexibility in setting the terms of the duties imposed on those managing the company.

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