Formerly known as John K. Carter Law, P.A.

When you’re forming a business in Florida and you have 2+ owners, you need clear, written, and enforceable ownership agreements. The attorneys at John K. Carter Law explain why this one key document can protect your partnership. for your new post

This post focuses on limited liability company (LLC) operating agreements as these are the most common type of business entities created today. The concepts discussed apply to the operating agreement of an LLC.

Our attorneys know first-hand how important LLC operating agreements are. Today, we explain what they are, what to include in the document, and what happens in case of a change or breach. Please do not find yourself starting a business, even with your best friend, without a governing ownership agreement! Call our firm for a free consultation.

LLC operating agreements are a contract relating to how business owners (called members) will handle potential circumstances. Such agreements describe how specific responsibilities will be delegated, as well as how to handle any future problems.

Of course, no one wishes to enter into a business foreseeing arguments, disagreements, or conflict in the future. In Florida, if the operating agreement is not properly maintained and a dispute arises, the default agreement will be the Revised Limited Liability Company Act, and it may prove contrary to the original intentions of the members.

It is not legally mandatory for an LLC to be established via an operating agreement in Florida, but it is a crucial step that should not be left out. Nevertheless, if all parties agree to form an LLC and an operating agreement is signed by all owners, it will be a legally binding document.

Generally speaking, common items that should be included in an operating agreement include:

• The members’ financial contributions to the company
• How draws, profits, and debts are distributed
• The members’ percentage membership interest
• Who will manage the Company?
• Managing records and delegating authority
• Voting rights for future decision-making
• How new members can be admitted
• How membership interests are to be managed upon the withdrawal, bankruptcy, or death of a member
• How disputes are to be handled

There are a variety of reasons for an operating agreement to fall short or to become breached. These are not always malicious intent; there are instances of accidentally breaching the agreement or authority outlined.

If your LLC is not governed by a written operating agreement, it will not be sufficient to clarify the behavior of a member or direct the resolution of the dispute. Again, the Florida Revised Limited Liability Company Act will then rule how the dispute will be worked out and enforced, which may not be what you or the company want.

However, an operating agreement prepared by an experienced corporate attorney will govern appropriate conduct of the members of the LLC. This documentation will also provide mechanics for the resolution of disputes and the remedies for violation of the operating agreement as intended by the members.

An experienced business attorney at the John K. Carter Firm will review your unique Florida operating agreement, or lack thereof, as well as offer counsel to help you and your business, assisting you every step of the way.  

Let’s face it, many never expect their company to need legal help, especially when it comes to your likely long-time friends (possibly family) now becoming partners. In business, things can change and cause unexpected disputes between the members.

You focus on operating and growing your business. Our firm specializes in business law and can help you and your partners build comprehensive governing agreements. John K. Carter Law, P.A. can also work on behalf of the company or its owner to resolve the matter if the operating agreement is breached. 

Call us today at (727) 456-8970 for a free consultation and to see how our legal team can best prepare your operating or other business governing agreement. We will work hard to protect your LLC and give you peace of mind that your business is legally sound.