In Florida, a limited liability company (LLC) is a common type of corporate entity. It combines aspects of a corporation and a partnership and provides its owners with flexibility, tax advantages, and limited liability protection. A filing fee must be paid, articles of incorporation must be submitted to the Division of Corporations of the Florida Department of State, and specific state rules and regulations must be followed in order to create an LLC in Florida. However, an operating agreement is still another crucial document that Florida LLCs need to have.
An operating agreement is a legal contract that describes how an LLC operates on a day-to-day basis. It outlines the rights, responsibilities, and obligations of the LLC’s members (owners) and management (if any), as well as the policies and processes for running the company. Although an LLC is not required by Florida law to have an operating agreement, having one is strongly advised for a number of reasons.
First, an operational agreement can aid in preventing disagreements and miscommunications between the members. The LLC can function more effectively and easily by outlining the duties and responsibilities of each member as well as the decision-making procedure. Second, an operating agreement might shield the members’ individual assets from any obligations or debts incurred by the LLC. Additionally, it can shed light on how members are allocated earnings and losses and the tax ramifications of doing so. Last but not least, an operating agreement can raise the LLC’s reputation and professionalism, particularly when working with outside parties like banks, investors, or clients.
You are not required to register an LLC operating agreement with the Division of Corporations or any other state entity in Florida. Instead, you should preserve a copy of the agreement with the LLC’s other records, which should also include the articles of organization, the IRS EIN, and any other pertinent paperwork. To ensure its legitimacy and authenticity, the operational agreement should be signed and dated by each member and, if possible, notarized.
In terms of privacy, an operational agreement is a private contract that is not needed to be made available to the general public or to any third party unless required by law or a court order. The amount of information to include in the operational agreement and who can access it can therefore be decided by the members. It is crucial to remember that some information, such as the names and addresses of the members and management, must be published in the organization’s articles of incorporation and might be made public.
Although it is a good idea to have at least one witness sign the operating agreement, Florida law does not mandate that it be witnessed or notarized. Any individual who can verify the veracity of the signatures and is not a member or manager of the LLC may serve as the witness. Having a witness present can also assist in preventing future disputes or objections to the agreement’s legality.
A Florida LLC operating agreement is an essential legal document that can give the company clarity, security, and professionalism. Even though it is not required, it is strongly advised to have one and to keep it updated as the LLC changes. LLC owners can make educated decisions and stay out of trouble by being aware of the requirements, filing procedures, secrecy, and witness possibilities of an operating agreement.
Yes, a Florida LLC’s operating agreement is regarded as a private document. It is not a matter of public record and is not required to be submitted to the Florida Secretary of State. The operating agreement, a private compact between the LLC’s members, spells out each member’s responsibilities. It is crucial to remember that some details in the operating agreement, including the LLC’s name and address, must also appear in the Articles of Organization, which are a matter of public record.