Sign Florida Banking LLC Operating Agreement Mobile

Industry sign banking florida llc operating agreement mobile

hello my name is Joe Rosen I'm an attorney in Boca Raton Florida today I'm going to talk a little bit about Florida LLC operating agreements and how they work I'm also going to briefly summarize some of some of the provisions you'd want to have in your Florida LLC operating agreement so first let's ask the simple question what is an operating agreement very simply an operating agreement is an agreement between and among the owners of the LLC now the purpose of the operating agreement is to do a couple of things first the OE defines the rights of the members second the OE establishes the responsibilities and obligations of the members to each other and to the company and third the oay governs the affairs of the company now besides all of the things that I just stated in a much broader sense by clearly stating all of the responsibilities of the members a written operating agreement can help resolve major conflicts between the members when an issue arises during the course of the business in the future now in Florida are you required to have an operating agreement the answer is no Florida law more specifically chapter 605 which governs LLC's in Florida doesn't require you to have an operating agreement here's an important note all LLC's in Florida are governed by chapter 605 Florida Statutes okay now let's say that you have a Florida LLC but you don't have an operating agreement so how will your LLC be governed if you don't have one how are conflicts and issues going to be resolved between the members okay if you don't have an operating agreement by default the LLC and its members will be governed by the default provisions of chapter 605 Florida Statutes that means that if at any time an issue arises in regards to your LLC then you'd have to look to chapter 605 and its default provisions to determine how your issue will be resolved if you don't have an operating agreement but if you do have an operating agreement then as a general rule your written operating agreement will govern your LLC in other words your operating agreement will effectively be running your company and if the terms of your operating agreement don't address a specific matter or a specific issue that you're having with your LLC then only then will the statutory provisions of chapter 605 govern the matter so I'm sure at this point you're starting to see that by having an operating agreement in place you and your co-owners will be in a better position to manage and to control your business and also how you're going to deal with conflicts in the future so now let's go over some of the provisions you'll want to consider having in your florida operating agreement name of business and statement of business purpose okay so you want your operating agreement to set out the name of your business and the business purpose your LLC name should be the exact same name as the name that is listed on your company's articles of organization the articles of organization is the documents which actually creates your LLC as for the business purpose it usually suffice us to just state that your LLC's business purpose is to carry on any lawful business as allowed under the LLC Act but you can also state the specific purpose of the business for example if you're running let's say a landscape business you can state that that for your business purpose identify the members of the LLC your operating agreement should clearly state the names of all of the members of the company in addition each members ownership interest in the company and his or her corresponding right to receive distributions of profits should be clearly stated as well usually it might be easy to just to just attach an exhibit to your operating agreement that lists the owners and their ownership interests so for example the members can be listed under exhibit a of your LLC operating agreement how will your LLC be taxed your operating agreement should state what kind of tax treatment your LLC will be subjected to so by default a multi-member LLC will be taxed like a partnership but an LLC has the option to choose to be taxed like an S corporation or a C corporation now if you're not sure how your LLC should be taxed you should consult a CPA or other tax professional before you finalize your operating agreement contributions of capital your operating agreement should state the amount of capital contributions that each member will provide to the LLC now to be clear the Florida LLC Act doesn't actually require members to make any capital contributions to the LLC and none of the members are actually required to make capital contributions unless the operating agreement provides otherwise so if you plan on having copic capital contributions made to the LLC by any members or all the members those contributions should be specified in the operating agreement distribution of profits your operating agreement should specify how and when the distribution of profits should be made to the members you can provide that distributions can be made quarterly monthly or based upon some other level of frequency how will your LLC be managed so an LLC can either be member managed or manager managed you'll need to state in your operating agreement in which specific manner your LLC will be managed will the members manage the LLC or will the LLC designate a specific person to manage the LLC's business and affairs remember the person or persons who will manage your LLC are going to have the general authority to make do decisions negotiate contracts sign the cheques draw funds out of the company account and so forth the manager is the person who will essentially run your company if you're operating if your operating agreement is silent about who manages the company then by default the management of the LLC will be vested in the members how will your LLC make important decisions your LLC will eventually be confronted with making key decisions about the business from time to time especially in a situation where your LLC is run by a manager the manager is going to generally make decisions on behalf of your LLC but there may be certain decisions relating to your LLC which you don't want the manager to make on his own because a wrong decision could possibly damage your business so taking this into account your operating agreement can carve out certain decisions of the LLC that will need to be approved by the members or by a certain percentage of the members like a majority for instance some decisions of the LLC which you may want the members to approve before the action is taken could include for example borrowing money on behalf of the LLC pledging the assets of the LLC to secure a loan selling the assets of the LLC to an interested buyer or let's say making a major purchase of inventory or equipment what if you need to expel a member from the LLC this one is a touchy subject but you can encounter a situation where one of the members is creating disarray in the company or is harming the company and you may want to frankly boot this member out from the company so can you do that by default without an operating agreement you can expel a member from the LLC but the requirements to do so under the LLC act are sort of tough to meet for instance the Act allows you to expel a member from the LLC if the other members agree by unanimous sent to expel the member but you'll have to show that it would be unlawful to carry on the business of the company with this person as a member in other words even if you don't like this particular member and he or she rubs you the wrong way if that person is not doing anything that is actually unlawful you'll have a hard time trying to remove them from the LLC another method of removing a member from an LLC without an operating agreement is by judicial expulsion in other words you can only expel the member from the LLC through court intervention and that could get very very expensive so to give other members some more flexibility your operating agreement can specify a list of events that could trigger a members expulsion from the LLC these things could include for example a members breach of the operating agreement his or her failure to perform required services to the company failing to make a capital contribution competing with the LLC or engaging in persistent contact that might be harmful or fraudulent to the company it's really up to you how you want to define the terms of a members expulsion can a member transfer his interest to another person your operating agreement should have restrictions on a members ability to transfer his interest to another party if one of the members decides to sell those interest to let's say an outside party you might be stuck with having an outsider as a part owner of your LLC so to avoid Outsiders joining your LLC place restrictions on a members ability to sell their interest in the LLC usually the operating agreement can require that anytime a member wants to sell us interest to another party he or she will need to get the consent of the other members so this type of transfer restriction will allow you to control who's going to be part of your company obviously we couldn't cover all of the provisions you can have in your operating agreement but we try to highlight some of the more important terms of your LLC operating agreement we hope you found our video helpful if you ever need the assistance of a Florida business attorney or if you have a business matter that you might need to litigate please call me at nine fifty four five six zero seven five three eight or send us an e-mail at joseph at rosen la boca comm