Owning a business can have tremendous benefits, from higher earning potential to more free time. However, if not properly managed, it may result in bankruptcy and the collection of properties of the business owners.
Our business experts have outlined the process of entering a multi-member LLC operating agreement to protect assets in case of business failure.
Multi-Member LLC Operating Agreement in Florida
A Multi-Member LLC operating agreement is a legal document implemented in a company. Though it is not a requirement for running a business in Florida, it can be implemented as long as all founding members of the company have agreed.
In case of business failure, this agreement will protect the founding members’ assets and properties from being collected by banks and other financial institutions.
Aside from that, LLCs provide an advantage for less need for paperwork. If a company is under LLC, it can be managed informally, and there’s no need for an annual shareholder’s meeting.
The best advantage is the pass-through taxation wherein the company under LLC is not required to pay LLC taxes or corporate taxes. The income and expenses of the company pass through to the owners’ personal income taxes.
How to Write a Florida Multi-Member LLC Operating Agreement
First, you need to gather all the necessary information before drafting a Multi-Member LLC. Identify the company name, date when the agreement shall be enforced, name and address of each founding member of the LLC, and the business address.
You will also need the following information to fill up the required data in the LLC forms:
- Term of the company
- Purpose of the company
- Date when the company was formed
- Admission process for new members
- Contributions of each founding member
- Process for amendment of the legal document
- Percentage of interest for each founding member
- Process for withdrawing membership for current members
- Operating process on how to dissolve and liquidate the LLC
- Though not required, annual dates for meeting with the members of the LLC
Once all necessary information is present, each member needs to review the document. If there are no more changes, then each member will sign and date it. The legal office will notarize it to finalize it. Lastly, ensure that each member has a signed copy for their personal records.
How to Establish a Multi-Member LLC in Florida
- Write your LLC operating agreement and have it signed by all members of the LLC.
- Make sure that your business name is available before you apply for your business’ LLC online. You can check the availability of company names using the official State of Florida website. Once confirmed, you can now start filling in the form.
- Name an LLC agent who will receive the notices on behalf of your company.
- Decide between domestic and foreign LLC. Choose a domestic LLC if your company only exists in the state of Florida [1]. Otherwise, choose the foreign LLC.
- Pay the filing fee of $125.
- Apply and obtain your company’s Employer Identification Number. This will allow your company to do legal transactions such as paying for your business office, employees, or even applying for a business loan.
Conclusion
Entering a Florida Multi-Member LLC operating agreement has its numerous benefits. Drafting this document agreement will need the members’ information, company name, date of establishment, and others.
Before applying, ensure the availability of your business name then file it through the state’s official website.
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