Section 607.0701 of the Florida Statutes requires that all corporations conduct an annual meeting of shareholders. This annual meeting of shareholders is primarily for the election of directors who are responsible for the operation of the corporation’s business. However, any corporate business can be conducted at the meeting, such as the directors’ appointment of the corporation’s president, secretary and treasurer.
Section 607.1601 of the Florida Statutes requires that minutes of all corporate meetings be prepared and kept as part of the corporation’s permanent records.
Failure to conduct an annual meeting
Minutes of all shareholders’ meetings must be kept by the corporation for the prior three years. Failure to conduct an annual meeting, and keep minutes therefore, may potentially result in the loss of corporate protection for the individual shareholders.
Should a creditor pursue and successfully argue the legal concept of “piercing the corporate veil,” the corporation’s debts will become liabilities to be paid from the personal assets of the shareholders.
Although not required to hold meetings or maintain minutes of meetings, limited liability company (“LLC”) owners can face these same issues if their conduct does not reflect a respect for the separateness of the LLC’s activity from their own.
Beginning on January 01, 2015
Beginning on January 01, 2015, all LLCs organized in Florida will be subject to the revised Florida Limited Liability Company Act as codified in Section 605 of the Florida Statutes (the “New Act”).
There are several important changes that take place under the New Act, including eliminating the concept of the “managing-member” as well as recognizing the agency power of members and managers by giving them “statutory apparent authority” to bind the LLC.
What Does the LLC Require?
LLCs are required to now be either member-managed or manager-managed. Absent a contrary provision in the articles of organization or operating agreement, all Florida LLCs are considered to be member-managed, and all members have authority as agents of the LLC to bind the LLC.
Since information regarding whether a particular LLC is member-managed or manager-managed is not required in a publicly filed record, third parties will need to request copies of the LLC’s operating agreement to determine the authority of a member (if such information is not provided in the articles of organization).
The New Act does authorize the filing of a statement of authority with the Florida Department of State in order to provide clarity for this apparent authority issue. Such a statement of authority creates a safeguard for LLCs that want to limit the power of one or more members, managers, or other persons to bind the LLC.
Cipparone & Cipparone, P.A. is happy to assist all of its corporate and LLC clients to ensure that their entities are in compliance with the current Florida law.
We can review your existing corporate governance documents to determine whether changes should be made to properly reflect the decision-making authority within your entity, in addition to assisting you with your annual meeting and minutes requirements.
These services can be performed on an hourly or flat fee basis nzaj4fb. Please contact our office should you have any questions about the Florida law requirements or wish to proceed with this service.
— From The Desk Of Cal Harding
Tags: LLC Business, Local LLC Business, Reminders For LLC Business, Small LLC Business
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