This year’s Florida legislature has enacted a revised limited liability company statute called the Florida Revised Limited Liability Company Act. Governor Scott is expected to sign the bill. This LLC statute revision had been planned over several years. The revised LLC statute does not alter the important LLC laws relevant to asset protection planning in Florida.
The Revised LLC Act continues the charging lien amendments enacted in the 2011 session in response to the January, 2010, Florida Supreme Court decision in the Olmstead case. The charging lien still is the creditors exclusive remedy against the LLC interest of a multi-member LLC.
The new law contains some provision which make it easier for companies to transact and create businesses with Florida LLCs. For example, the Act provides for “interest exchanges” ( an acquisition of an interest in an LLC) as a new means of combining a Florida LLC with another business entity. The Act now permits a non-economic member with not financial obligation to have a profit interest in an LLC- this will supposedly facilitate debt financing transactions as some lenders demand the ability to appoint a special non-economic LLC member to protect the LLC and the lender’s interest.
The legislature decided not to include a provision for a series LLC where a single LLC may have assets held in distinct and separate series or internal units. Some people were hoping for a series LLC provision similar to the Delaware series LLC act.
The Revised LLC law creates a new Chapter in the Florida Statutes, Chapter 605. LLC’s in existence before January 1, 2014, may continue to operate under the provisions of the current law contained in Chapter 608. As of January, 2015, all Florida LLCs will be subject to the provisions of the new Chapter 605, and Chapter 608 will be repealed. Most LLCs do not have to change their operating agreements because of this new law.