Florida LLC Operating Agreements

A Florida LLC operating agreement is a legal document that outlines how a Florida limited liability company will operate. It governs the relationships among LLC members, how the business is managed, how profits are distributed, and how disputes are resolved. Although Florida law does not require an operating agreement, having one provides clarity and protection for LLC members.

LLC operating agreements are often overlooked by small business owners, but they are crucial for protecting personal liability and ensuring smooth business operations.

What Is a Florida LLC Operating Agreement?

A Florida LLC operating agreement is a contract between the members (owners) of an LLC. It sets out the rights, responsibilities, and financial interests of each member. The agreement can be used for both single-member and multi-member LLCs.

Without an operating agreement, disputes between members are subject to Florida’s default LLC statutes, which may not reflect the members’ intent. A written agreement allows members to customize how the business will be managed and how decisions will be made.

Do You Need an Operating Agreement for an LLC in Florida?

Florida law does not require an LLC to have a written operating agreement. However, it’s still a good idea to have one.

Even a single-member LLC should have a written operating agreement. The document can help prove that the LLC is a separate legal entity, which is important for asset protection and limiting personal liability. Courts often examine operating agreements to determine whether the LLC is being operated properly and whether creditors can pierce the corporate veil.

Benefits of an LLC Operating Agreement

Protects Members from Personal Liability

An operating agreement helps demonstrate that the LLC is a separate legal entity. This separation is essential to protect members’ personal assets from creditors of the LLC.

Avoids Disputes Between Members

An agreement provides a clear roadmap for decision-making, profit sharing, and conflict resolution. Without one, disagreements may lead to costly legal disputes.

Supports Asset Protection

Operating agreements can include provisions that limit the rights of creditors to access a member’s interest in the LLC. For example, they may include transfer restrictions or charging order protections, which strengthen asset protection in Florida.

Allows Custom Management Structures

LLCs can be member-managed or manager-managed. The operating agreement specifies who has authority and how day-to-day decisions are made.

Documents Financial Contributions and Ownership

The agreement can spell out how much each member contributes to the LLC and what percentage of profits each member will receive. This helps prevent misunderstandings later on.

Can an Operating Agreement Override Florida Law?

In many cases, yes. Florida’s LLC statute allows members to override most default rules through the operating agreement. However, there are certain provisions that cannot be waived, such as the requirement to act in good faith.

The agreement cannot eliminate fiduciary duties entirely, and it cannot prevent a court from ordering dissolution if necessary. Still, most day-to-day governance and financial arrangements can be customized.

What Should Be Included in a Florida LLC Operating Agreement?

LLC members—especially those who are not family or close friends—should have a detailed discussion before finalizing their Florida LLC operating agreement. These conversations help prevent disputes and ensure that everyone is on the same page. The operating agreement should include the group’s answers to the following important questions:

Capital Contributions

• How much money is each member expected to contribute at the start?
• Will some members contribute services instead of money, and how will this affect their share of profits?
• Who is responsible for contributing more money if the LLC needs additional capital?

Financial Risk and Guarantees

• Are any members personally guaranteeing LLC debt?
• How will those members be compensated for taking on this extra risk?

Distributions and Profits

• Who decides when the LLC can afford to distribute profits?
• Are any members entitled to a preferred return of capital or profits before others receive distributions?

Member Conduct and Restrictions

• Will members agree to non-compete or confidentiality clauses?
• What happens if a member wants to leave or retire from the LLC?
• How is the departing member’s ownership interest valued and paid out?

Unexpected Events

• What happens if a member dies, becomes disabled, or can no longer contribute to the business?
• How will the LLC handle ownership changes caused by divorce or court orders involving a member’s interest?

Tax Elections

• Will the LLC elect to be taxed as an S-corporation?

Operating agreements should be tailored to the specific needs of the business and its members. Generic or template agreements may not adequately protect the members or reflect their intentions.

Does a Single-Member LLC Need an Operating Agreement?

Yes. A single-member LLC in Florida should still have an operating agreement.

Even though there is only one owner, an operating agreement provides documentation that the LLC is a separate entity. This separation supports the member’s claim of limited liability and can protect personal assets in the event of a lawsuit or creditor claim.

Is an LLC Operating Agreement Public in Florida?

No, an LLC operating agreement is not filed with the Florida Division of Corporations and is not part of the public record. The document is kept internally by the LLC and its members.

Because it is private, members can agree on confidential terms regarding ownership percentages, profit distributions, and management authority.

Do You Need a Lawyer to Draft an Operating Agreement?

While Florida law does not require an attorney, it is highly recommended that a lawyer draft or review your LLC operating agreement. Mistakes or omissions in the agreement can lead to legal disputes or unintended consequences.

A lawyer can customize the agreement to match your goals, ensure compliance with Florida law, and include asset protection provisions that would not appear in a generic template.