New LLC Act to take effect January 1, 2015

New LLC Act to take effect January 1, 2015

As we welcome in the New Year, the Revised Florida LLC Act (Senate Bill 1300, and as amended, House Bill 1079) will be taking effect. Every LLC member should address these changes in order to avoid putting their company in a compromising position.

This will affect all LLCs, both old and new, as there is no ‘grandfather’ rule in effect.

What does this mean for current LLCs? Many things have been more thoroughly defined in comparison to the previous act in order eliminate loopholes. For example, the new act modifies the rules for the power of members and managers to bind the company, modifies provisions addressing the LLC’s management structure, and modifies provisions relating to member dissociation and company dissolution. It also creates the potential for personal liability.

Why the short notice? Actually, the amendments to the Florida LLC Act were officially made in May of 2013. The Florida Bar began drafting the bill in 2008 and eventually settled on the changes we currently see in the Revised Florida LLC Act. The January 1, 2015 date was decided upon for all Florida LLCs to have adopted the guidelines in the amended act.

Why the changes? The majority of the changes came with the intent of making Florida a more appealing destination to foreign businesses considering an LLC approach. The drafting process began in 2008 while the state was stuck in the thick of the economic downturn. This also modernizes the Act originally written in 1982, and addresses the enormous growth seen in the number of LLCs in the state.

Is your LLC in compliance with the Revised Florida LLC Act? If you have any questions about the Revised Florida LLC Act, or how it might affect your LLC, you can contact one of our excellent St. Petersburg attorneys who would be happy to walk you through the modifications in the bill.