The Florida Revised Limited Liability Company Act contains Sixteen (16) Mandatory Non-Waivable Provisions - Do you know what they are?

Florida significantly revised its statutory law governing limited liability companies with the enactment of the Florida Revised Limited Liability Company Act (“RLLCA”) and on January 1, 2015 the RLLCA became mandatory for all Florida Limited Liability Companies. The RLLCA contains sixteen (16) non-waivable statutory provisions (as opposed to the old version of the act, which only contained six (6) non-waivable statutory provisions).

Accordingly, under the RLLCA, an operating agreement is not permitted to do any of the following:

1. Vary an LLC’s capacity to sue and be sued in its own name.

2. Apply any law other than Florida law to:
   1. the internal affairs of a Florida LLC; or
   2. the member or manager liability of a member or manager of a Florida LLC, for the LLC’s debts, obligations or other liabilities of an LLC.

3. Vary the Division of Corporations (“DOC”) requirements (including the documents required to be filed) or registered agent requirements of the RLLCA.

4. Vary the provisions pertaining to signing and filing on behalf of the LLC pursuant to a judicial order.

5. Eliminate the duty of loyalty or the duty of care, except as otherwise allowed by the RLLCA. For example, as long as the conduct doesn’t involve bad faith, willful or intentional misconduct or a knowing violation of law, and it’s not manifestly unreasonable, the operating agreement may:
   1. alter or eliminate aspects of the duty of loyalty;
   2. identify categories of activities that don’t violate the duty of loyalty;
   3. alter the duty of care (but not permit any willful or intentional misconduct or a knowing violation of law); and
   4. alter or eliminate any other fiduciary duty, including the common law duties of loyalty and care.

6. Eliminate the obligation of good faith and fair dealing, but the operating agreement may include the standards to measure performance by, if the standards are not manifestly unreasonable.

7. Relieve or exonerate conduct involving bad faith, willful or intentional misconduct or a knowing violation of law from liability.

8. Unreasonably restrict the duties and rights of members and managers to inspect and copy LLC, but the operating agreement can include reasonable availability and use restrictions on the information obtained and may define remedies, including liquidated damages, for any breaches.

9. Vary the grounds for judicial dissolution specified in the RLLCA.

10. Vary the requirement to wind up the LLC’s business, activities and affairs upon dissolution, including:
    1. discharging or making provision for the LLC’s debts, obligations and other liabilities;
    2. settling the LLC’s activities and affairs;
    3. distributing the LLC’s assets; and
    4. if applicable, judicial supervision of the process.

11. Unreasonably restrict a member’s right to maintain a direct or derivative action.

12. Vary the provisions pertaining to special litigation committees, but the operating agreement may bar the LLC (but not a court) from appointing a special litigation committee.

13. Vary a member’s right to approve a merger, conversion or interest exchange if the member will have any interest holder liability for any of the LLC’s debts, obligations or other liabilities arising after the extraordinary transaction.

14. Vary the required contents of a plan of merger, plan of conversion, plan of domestication or plan of interest exchange.

15. Restrict the rights of a person other than a member, manager, transferee of an LLC transferable interest or a dissociated member, except as otherwise provided in the RLLCA.

16. Indemnify a member or manager for:
    1. a transaction if the member or manager got an improper personal benefit;
    2. a circumstance under which the liability provisions for improper distributions are applicable;
    3. conduct involving bad faith, willful or intentional misconduct or a knowing violation of law; or
    4. a breach of fiduciary duties or obligations as restricted, expanded or eliminated by the operating agreement to the extent allowed by the RLLCA.

Thinking of forming an LLC in Florida? Understanding and following these provisions will be critical to your business' long-term success. Our knowledgeable Florida business litigation lawyers at the Rosenthal Law Group can assist you with all your business formation needs and concerns. Call our offices today.