Members Have More Approval Rights Under New Florida LLC Act

By:  Jim Hoctor

The new Florida LLC Act applies to all LLC’s formed in 2014.  As of January 1, 2015, it will apply to all Florida LLC’s.  Under the new Act, any action outside of the ordinary course of the LLC’s business and affairs has to be approved by the members even in a manager-managed LLC.  However, this can be changed by the operating agreement.  Most existing operating agreements do not deal with this.  Therefore, this is one of several changes under the new act that make it important to review and update your LLC’s operating agreement. read more

New Florida LLC Act – Foreclosure Still a Possibility on Interests in Single-Member LLC’s

By: Jim Hoctor

The Florida legislature has passed a bill that completely revises the Florida Limited Liability Company Act.  It is now awaiting the governor’s signature.  The new act keeps the provision added to the Florida Limited Liability Company Act last year as a result of the Olmstead case.  That provision allows a judgment creditor to foreclose on the interest of a member in a single-member LLC, but also specifically limits the remedy of a judgment creditor of a member of a multiple-member Florida LLC to a charging order.  Therefore, you should continue to consider using an LLC formed in Delaware (or any other state that limits a judgment creditor’s remedy to a charging order for both multiple-member and single-member LLC’s) for any single-member LLC that owns real estate or other valuable investment property.  On the other hand, a Florida LLC remains a good choice for a multi-member LLC that will own investment property. read more