Operating Agreement for Florida Limited Liability Company

By Laura Payet

Operating Agreement for Florida Limited Liability Company

By Laura Payet

A limited liability company (LLC) is a flexible business format that allows its owners, called members, to limit their liability for the company's debts and obligations. Florida's current LLC act became effective in 2014. While Florida, like many other states, does not require an LLC to have an operating agreement, having a such an agreement establishing the members' rights and responsibilities in writing is the best way to avoid future confusion and conflict. Furthermore, without an operating agreement, Florida law provides the default provisions governing business operations. With an operating agreement, the members themselves can set out how the business will function.

Businesspeople gathering around desktop computer

What is an operating agreement?

An operating agreement is a contract among an LLC's members that governs the company's operations in a way that is tailored to the members' needs. According to Florida statute section 605.0105(1), an operating agreement governs:

  • Relations among the members and between the members and the LLC
  • The rights and duties of a person acting as manager of the LLC
  • The activities and affairs of the company and how they are conducted
  • How and when the operating agreement can be amended

What restrictions does Florida LLC law place on an operating agreement?

Florida law is generally flexible about how an LLC runs its business, but it prohibits an operating agreement from including certain provisions. For example, a Florida LLC operating agreement may not:

  • Eliminate the fiduciary duties of loyalty or care that members and managers owe to the LLC and each other
  • Eliminate the obligation of good faith and fair dealing
  • Relieve or exonerate anyone from liability for bad faith conduct or knowing violations of law
  • Unreasonably restrict a member's right to see and copy business records

What should go in an operating agreement?

A typical operating agreement identifies the name of the LLC and the address of its principal business office and registered office. It should specify the LLC's internal operations and the members' rights and obligations to each other and the company. Because Florida law presumes that all LLCs are member-managed, meaning the members run the day-to-day business, the operating agreement should make plain that a manager or managing committee will handle business functions if that is the case. An operating agreement should also state the business's purpose, as well as whether the company intends to be taxed as a partnership or a corporation. Further, the operating agreement should describe the procedure for admitting new members and what happens when a member decides to withdraw from the LLC.

In addition, Florida law's definition of an operating agreement includes written, oral, and implied agreements. Therefore, to eliminate any future clashes about whether implied agreements exist and what they say, the written operating agreement should include an integration clause. An integration clause specifies that the operating agreement as written contains the entire agreement among the members and that it can only be modified in writing.

These are only a few of the provisions you may want to include in your operating agreement. You can write an operating agreement yourself, but many find it helpful to work with an online legal services provider to ensure the agreement meets the expectations and needs of the members and business.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.