Fast, Professional Florida LLC
To form a Florida LLC, you must first decide what the LLC will be named. The name must satisfy a few requirements. First, the name cannot conflict with any other company names or trademarks in the state of Florida. The website of the Florida Division of Companies has a business search to help meet this requirement. The name must also contain some designation that the company is an LLC. Finally, the name cannot imply any affiliation with the government, a profession that requires a special license, a bank, or any activities unauthorized by law. Unlike many other states, Florida does not have a procedure for reserving an LLC name prior to filing the formation documents.
Choosing a Registered Agent
In order to form an LLC in Florida, you need a registered agent in Florida with a valid Florida mailing address. The duties of a registered agent require trust and diligence, which is why many Florida LLCs choose a reputable incorporation firm, such as Agents and Corporations, Inc. (Incnow) to serve as their registered agent. IncNow’s incorporation specialists can be hired to complete the LLC formation process.
What is a Florida LLC Operating Agreement?
Upon forming an LLC, the members (who are the owners), are required to enter into a private agreement to structure the ownership and management of the LLC however they wish. This agreement declares the ownership, management structure and operating procedures. If ownership in the LLC changes the operating agreement can be modified and restructured later on in the company’s life.
Even a single member LLC should have an operating agreement.
Here are some important definitions about the Florida LLC Operating Agreement:
- Get it in writing. – Even though the Florida LLC Act states it is legal for an Operating Agreement to be “written or oral”, documenting it in a formal written contract will be favored in court. IncNow will prepare a proposed LLC Operating Agreement as part of most service packages. Changes can be made by you before signing it.
- It may be needed to open a business bank account. – Financial institutions may require a copy of your Operating Agreement in order to verify you have “signing power” for the LLC. In addition to the Operating Agreement, the LLC’s Federal Tax ID Number (EIN) might be needed.
Understanding the Role of the Florida LLC Operating Agreement
The Florida LLC Operating Agreement not only sets forth ownership and management structure but it should anticipate and provide solutions to common future problems to avoid business partner litigation.
If any partnership disputes between members were to arise a well-drafted Operating Agreement should resolve these issues if any member were to enforce the Operating Agreement. This documents each parties’ expectations in the beginning to address problems in the future. From our experience, most problems in an LLC result from owner disagreements. Addressing these issues in advance set forth in this Operating Agreement will reduce the chances for problems to occur in the future.
It should set forth capital contributions, ownership percentages, management structure and fiduciary duties. It should also address buy-out rights, valuation formulas, transfer restrictions and tax matters. All members of the LLC must agree to the terms of the Operating Agreement for it to be binding upon them.
Those provisions should address:
- LLC Ownership – Including who the members of the LLC are, whether there are different voting rights between members, and the units of company interests owned by each member. Often LLC Operating Agreements have two classes of interests, voting and non-voting.
- Voting Rights – Company Interests can be divided into Voting and Non-Voting units to separate owners into ones who make company decisions and those who are passive investors.
- Capital Contributions – What are the consequences if a Member fails to make his initial capital contribution or fails to make subsequent capital calls?
- Management Structure – Establishes whether the LLC will be run by its owners (“Member-Managed”) or run by non-owner executives (“Manager-Managed”) or a hybrid that allows for concurrent management by both, with a right among the Voting Members to hire and fire the manager.
- Transfer of Interest – Spells out whether a member can transfer interests to another person and what restrictions are placed on such transfers.
- Member Withdrawal – The terms in which a member can leave the LLC, and what will happen with their interest, as well as what happens if they die or become incapacitated.
- LLC Wind-Down – What events trigger the dissolution and subsequent cancellation of the LLC and how the “winding up” of company affairs will be handled.
Why a single member Florida LLC needs an operating agreement?
IncNow includes your signature-ready LLC Operating Agreement in our Complete LLC Package.