Opinion ID: 2537285
Heading Depth: 2
Heading Rank: 2

Heading: Statutory Framework for Florida LLCs

Text: The rules governing the formation and operation of Florida LLCs are set forth in Florida's LLC Act. In considering the question at issue, we focus on the provisions of the LLC Act that set forth the authorization for single-member LLCs, the characteristics of ownership interests, the limitations on the transfer of ownership interests, and the authorization of a charging order remedy for personal creditors of LLC members. Section 608.405, Florida Statutes (2008), provides that [o]ne or more persons may form a limited liability company. A person with an ownership interest in an LLC is described as a member, which is defined in section 608.402(21) as any person who has been admitted to a limited liability company as a member in accordance with this chapter and has an economic interest in a limited liability company which may, but need not, be represented by a capital account. The terms membership interest, member's interest, and interest are defined as a member's share of the profits and losses of the limited liability company, the right to receive distributions of the limited liability company's assets, voting rights, management rights, or any other rights under this chapter or the articles of organization or operating agreement. § 608.402(23), Fla. Stat. (2008). Section 608.431 provides that [a]n interest of a member in a limited liability company is personal property. Section 608.432 contains provisions governing the [a]ssignment of member's interest. Under section 608.432(1), [a] limited liability company interest is assignable in whole or in part except as provided in the articles of organization or operating agreement. An assignee, however, has no right to participate in the management of the business and affairs of the LLC except as provided in the articles of organization or operating agreement and upon obtaining approval of all of the members of the limited liability company other than the member assigning a limited liability company interest or upon [c]ompliance with any procedure provided for in the articles of organization or operating agreement. Id. Accordingly, an assignment of a membership interest will not necessarily transfer the associated right to participate in the LLC's management. Such an assignment which does not transfer management rights only entitles the assignee to share in such profits and losses, to receive such distribution or distributions, and to receive such allocation of income, gain, loss, deduction, or credit or similar item to which the assignor was entitled, to the extent assigned. § 608.432(2)(b), Fla. Stat. (2008). Section 608.433which is headed Right of assignee to become memberreiterates that an assignee does not necessarily obtain the status of member. Section 608.433(1) states: Unless otherwise provided in the articles of organization or operating agreement, an assignee of a limited liability company interest may become a member only if all members other than the member assigning the interest consent. Section 608.433(4) sets forth the provisionmentioned in the certified questionwhich authorizes the charging order remedy for a judgment creditor of a member: On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the limited liability company membership interest of the member with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of such interest. This chapter does not deprive any member of the benefit of any exemption laws applicable to the member's interest.