By: Jim Hoctor
Just like a corporation, a limited liablity company can have non-voting interests. Non-voting interests are often used in LLC’s formed for family investments or when interests are given or sold to employees of the LLC. An important benefit of making these interests non-voting is that non-voting members don’t have “appraisal rights.” Under the Florida LLC act, appraisal rights give a dissenting voting member the right to force a court action to determine the value of his or her interest and require the company to purchase the interest based on that value. The new Florida limited liability company act has added the sale of all or substantially all of a LLC’s assets as an event that triggers appraisal rights. Previously, the only transactions that triggered appraisal rights for members of a Florida LLC were a merger or a conversion. Therefore, it is now even more important to consider using non-voting interests in Florida LLC’s.