What act governs limited liability companies (LLCs) in Florida?
Florida Revised Limited Liability Company Act
This act outlines the formation, management, and taxation of LLCs in Florida.
What must the name of an LLC include?
- Limited liability company
- L.L.C.
- LLC
The name must be distinguishable from other entities on file with the Department of State.
What are the mandatory contents of the articles of organization for an LLC?
- Name
- Principal Office
- Registered Agent and Registered Office
These elements are essential for the formation of an LLC in Florida.
True or false: An LLC must maintain a registered agent for service of process.
TRUE
The registered agent must be continuously maintained in the state.
What is a professional LLC abbreviated as?
PLLC
Professionals may form this type of LLC.
In a manager-managed LLC, who has equal rights in management?
Managers
A majority rules in decision-making among managers.
What are the duties owed by managers and members in an LLC?
- Duty of care
- Duty of loyalty
- Duty of good faith
These duties ensure responsible management of the LLC.
What must an LLC file annually to maintain its status?
Annual report
This report is required for compliance with state regulations.
How is an LLC generally taxed?
Like a partnership
Income is passed through to the owners unless it elects corporate taxation.
What type of liability do members and managers of an LLC generally have?
Limited liability
They are not personally liable for company debts.
What is one exception to the limited liability of members and managers?
Own torts
Members or managers are liable for their own torts and those under their direct control in a professional LLC.
What powers does an LLC have?
- Capacity to sue or be sued
- Hold property
- Adopt an operating agreement
These powers are similar to those of corporations.
What does continuity of life mean for an LLC?
Perpetual existence
An LLC continues to exist regardless of changes in membership.
Can a member transfer their interest in managing the company without consent?
No
A member may freely transfer their interest in profits and losses but needs unanimous consent for management interests.
In a member-managed LLC, how are votes weighted?
In proportion to the member’s percentage interest
Each member’s vote reflects their share in profits.
What right do members have regarding information in an LLC?
Right to inspect and copy records
Members can access records concerning the LLC’s activities and financial condition.
What is a charging order in the context of an LLC?
A lien against a member’s LLC interest
It allows a judgment creditor to receive distributions owed to the member.
What events can lead to the dissolution of an LLC?
- Event specified in the operating agreement
- Unanimous consent of all members
- Passage of 90 days with no members
- Court order
- Administrative dissolution by the Department of State
These events trigger the winding up of the LLC’s affairs.
What rights do members have regarding appraisal in a merger or conversion?
Entitled to vote against the plan and obtain appraisal rights
Members can seek payment for the fair value of their interest.
What is the governing rule for foreign LLCs?
Similar provisions as foreign corporations
Foreign LLCs are regulated similarly to foreign corporations and limited partnerships.
