Section 607.0701 of the Florida Statutes mandates that all corporations must hold an annual meeting of shareholders. The primary purpose of this meeting is to elect directors who bear the responsibility for overseeing the corporation’s operations.
However, corporations have the flexibility to address various corporate matters during this gathering, including the appointment of the president, secretary, and treasurer by the directors.
Furthermore, according to Section 607.1601 of the Florida Statutes, the preparation and retention of minutes for all corporate meetings are obligatory and form part of the corporation’s enduring records.
Failure to Conduct an Annual Meeting
The corporation is obligated to maintain minutes for all shareholders’ meetings over the preceding three years.
Neglecting to convene an annual meeting and uphold proper record-keeping could potentially jeopardize the individual shareholders’ corporate safeguards.
Piercing The Corporate Veil
In the event that a creditor pursues and successfully argues for the legal doctrine of “piercing the corporate veil,” the corporation’s debts will be treated as obligations to be settled from the personal assets of the shareholders.
While limited liability company (LLC) owners are not compelled to hold meetings or retain meeting minutes, they could encounter similar challenges if their actions fail to demonstrate respect for the separation between the LLC’s activities and their own.
Commencing January 01, 2015
Starting from January 01, 2015, all LLCs established in Florida will be subject to the revised Florida Limited Liability Company Act, codified in Section 605 of the Florida Statutes, referred to as the “New Act.”
Changes Under the New Act
The New Act introduces several significant changes, including the elimination of the “managing member” concept. Additionally, it recognizes the agency authority of members and managers by conferring upon them “statutory apparent authority” to bind the LLC.
LLCs are now required to adopt either a member-managed or manager-managed structure. In the absence of a contrary provision in the articles of organization or operating agreement, all Florida LLCs are presumed to be member-managed, granting all members the power to act as agents of the LLC.
Disclosure of whether a specific LLC is member-managed or manager-managed is not mandatory in publicly filed records, so third parties must request copies of the LLC’s operating agreement to ascertain a member’s authority (if this information is not included in the articles of organization).
The New Act permits the submission of a statement of authority to the Florida Department of State to clarify matters of apparent authority.
This statement serves as a safeguard for LLCs seeking to restrict the authority of certain members, managers, or other individuals to bind the LLC.
Cipparone & Cipparone, P.A.: Your Partner in Compliance
We, at Cipparone & Cipparone, P.A., are pleased to extend our support to all corporate and LLC clients in ensuring compliance with prevailing Florida law.
Our expertise allows us to review your existing corporate governance documents and recommend adjustments to accurately reflect the decision-making authority within your entity.
Moreover, we offer assistance in fulfilling your annual meeting and minutes requirements.
These services can be provided on an hourly or flat fee basis. Should you have inquiries regarding Florida law requirements or wish to proceed with our services, please do not hesitate to contact our office.
**This blog is for general informational purposes only. Cipparone & Cipparone, P.A. does not distribute legal advice through this blog. As such, this blog does not constitute legal or other professional advice, and no attorney-client relationship is created between the reader and Cipparone & Cipparone, P.A.Tags: LLC Business, Local LLC Business, Reminders For LLC Business, Small LLC Business
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