Last year, Florida revised the law of limited liability company. These changes were necessary and welcomed - Congress unanimously passed the 605th Florida State Act. But new laws are complex and effective dates are out of date, potential confusion arises. Currently, LLC should become a competent business counselor to help navigate these unknown waters.
Authority to dissolve under the new law
One of the important changes in the law is the ability of LLC members to "separate". That is to resign or withdraw.
Under the previous law, this problem was fairly simple. Members of LLC could not be separated before dissolution.
Under the new chapter 605, members of LLC have the authority to separate as a regular member at any time by explicitly withdrawing as a member under 605.0602 (1) This new power is mandatory, It can not be abandoned or changed. Section 605.0601 (1) .
There are, however, interesting things: an operational document can be stipulated that any dissociation is a violation of the operational document and that the action is consequently "unfair". Section 605.0601 (2). In that case, LLC members are liable for damages caused by disassembly to LLC and other members. Members can withdraw from membership, but they need to pay privileges.
Other aspects of dissociation
This new, abandonable right that can be dissolved is important in many respects beyond the mere permission of an LLC member to withdraw at any time before disbanding.
For example, under the old law, LLC members have confidence obligation of loyalty and care, and their members can not compete with LLC for business.
Under the new law, when members withdraw from membership, the duties of these trustees end with the right to participate in business management. However, members retain the right to receive dividends. Therefore, unless there is a language carefully created in the operational document, the dismantled members can start a competitive business while retaining the eligibility to receive dividends.
Such new non-competitive and non-soliciting contracts are one of many items to be included in the new LLC operating contract and will be added to existing corporate entities (by January 1, 2015). Another example is to specify whether the LLC or the remaining members can purchase the profit of the withdrawal member's LLC.
Among the many changes in chapter 605, there are complicated provisions on the power of members to be dismantled and the consequences of that action. Lawyers should create a new LLC management agreement to comply with this new legislation and will now be of great help in making necessary changes to existing LLC organized documents prior to January 1, 2015 Let's see.
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