What is included in a Florida LLC Operating Agreement?
Your operating agreement lays out the internal structure of your LLC. While you may include anything not already covered by Florida state statutes, a strong operating agreement will include:
- Activities of your LLC
- Transfer of membership interest
- Voting rights and decision-making powers
- Initial contributions
- Profits, losses, and distributions
- Management
- Compensation
- Bookkeeping procedures
- Dissolution
What information do I need for Northwest’s free Florida LLC operating agreement?
Want to focus on your business and leave the legal hullabaloo to us? Our lawyers have drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Articles of Organization.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There are a few spots in our template where you’ll need a signature from one or more members.
Why should a Florida LLC have an operating agreement?
A Florida LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to conduct company operations.
According to FL Stat § 605.0102, LLCs are not required to have a written operating agreement. However, an operating agreement is legally binding, which makes it one of your most important internal documents. Here’s why:
1. Your operating agreement proves you own your LLC.
In Florida, businesses can choose not to include the names of any members or managers in their Articles of Organization (although this information will eventually be required for the annual report). The minimal information required in the articles helps an LLC with initial privacy—but doesn’t let members show proof of ownership. And you’ll need proof of ownership to open a bank account or rent a business space. Because an operating agreement lists the names of all members and managers, it can be used to show that you own your business.
2. An operating agreement can help reinforce your limited liability status.
In order to maintain limited liability status, all LLCs must consistently demonstrate that the company is a separate legal entity from its members. In addition to setting up a bank account for your LLC, having an operating agreement helps show this separation by creating policies and procedures for the business.
3. An operating agreement can help settle disputes between members.
Hey, it happens. People fight, and sometimes they aren’t on the same page, which can make it difficult to move forward with your business. By having an operating agreement, you establish an agreed-upon set of rules for your company early on, which can help mitigate any misunderstandings later on.
4. An operating agreement can override Florida’s default laws.
If you don’t have an operating agreement, your business will be governed by Florida’s default laws. The problem is, Florida’s LLC statutes might not be right for your business. Having an operating agreement for your Florida LLC means that you can create an organizational structure (within the bounds of the law) to suit the needs of your particular business.
Florida Case Law
We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*
“Consider the case of Froonjian v Ultimate Combatant, LLC, where the failure to actually adopt and maintain an operating agreement led to disputes among the members, resulting in extensive and expensive litigation. An individual was added as a member of the LLC, then was promptly expelled. The courts, noting the absence of the operating agreement, applied the default statutory rules. As a result, the courts determined that the two members, constituting a majority interest of the LLC, could expel the other member. However, the court determined that the membership interest of the member could not be redistributed without violating the statutory rules. As a consequence, the expelled individual was permitted to restate their case back at the trial level, prolonging resolution to the matter.
“Such valuable resources could have been preserved for more fulfilling commercial purposes had the members of the LLC taken the time to memorialize and distill their understanding into an operating agreement.”
FAQs
No, statutes don’t specifically require a Florida operating agreement. However, if you don’t have an operating agreement, your LLC will be governed by the Florida Revised Limited Liability Company Act.
Nope. Your operating agreement is an internal document, so you’ll keep it on file with your business records.
Yes. It may seem a little strange, but even a single-member LLC will need an operating agreement for things like opening a bank account and reinforcing limited liability. An operating agreement is also necessary for overriding Florida’s default LLC laws.
*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.