The Florida Operating Agreement: 3 Things to Know

The Florida Operating Agreement: 3 Things to Know

The Florida Operating Agreement: 3 Things to Know

Hopefully, you wouldn’t go on a cross country road trip without GPS or a map. Your Florida Limited Liability Company needs to have an Operating Agreement for the same reason. Basically, it defines the business’s structure, management, and how the company’s members will make decisions. While the State of Florida doesn’t require an Operating Agreement to get your LLC started, it’s just as important as your other formation documents.

1. Why Do I Need an Operating Agreement in Florida?

First and foremost, your Operating Agreement solidifies your status as a Limited Liability Company by reinforcing the separation between the business owner and the business itself. Without one, solo entrepreneurs risk being declared a sole proprietorship. This exposes them to liability and puts their personal assets at risk.

Your Operating Agreement will also help carry your business through hardship. This includes provisions that outline how the business’s affairs should be wrapped up in the event that it’s no longer viable, what to do in the event that one or more of the Members leaves or becomes otherwise problematic, and how the Members can reach a consensus when they disagree with one another.

2. What Provisions Should I Include?

The areas that an Operating Agreement can cover are extensive, and what you need will depend on the unique qualities of your business. Still, there are some components that just about all Operating Agreements share. Yours should contain the basic information about your business: the name, its management structure, its principal address and the like. However, you’ll need to go into more detail regarding your plans for the future – whether positive or negative – of your Florida LLC.

If you have made any verbal agreements with the other Members, you should absolutely include it in your Operating Agreement. This way, if you end up in court, you can rest assured that you have the truth on your side. Record all contributions for the same reason. Define in no uncertain terms the exact responsibilities and fiduciary duties of the Members. You’ll want provisions on amending the Agreement, removing Members, and what circumstances can trigger the company’s dissolution.

For more information, you can read our blog on important Operating Agreement provisions here.

3. How to Prepare an Operating Agreement

Internet tutorials have created a do-it-yourself culture that, while fine for home improvement projects, can be disastrous for contracts. Yes, there are templates available online. No, we cannot recommend any of them in good faith. When it comes to the future of your business, you don’t want to settle for anything less than total protection. At the very least, you should have a local business attorney review any contracts that you draft yourself. Of course, it might be the smarter choice to ask a lawyer for help from start.

A lawyer-drafted Operating Agreement goes a long way to protecting a Florida LLC from potential liability and Member disputes. To order yours today, or to have a previously drafted Operating Agreement reviewed by our corporate attorney, visit our service page or give us a call at (727) 279-5037.

Image: Black Pen Placed on White Paper by Pixabay on Pexels.

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FL Patel Law PLLC is a boutique business law firm dedicated to entrepreneurs and companies.

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