Florida Has the Most Consequential Single-Member Rule in the Country
Florida does not require an LLC to have an operating agreement. Chapter 605, the Florida Revised Limited Liability Company Act, treats the document as the governing instrument. It supplies defaults for whatever the document omits. Section 605.0105(1) provides that the operating agreement governs relations among the members, the rights and duties of a manager, the activities and affairs of the company, and the means and conditions for amending the agreement. Section 605.0105(2) then fills every gap with the chapter itself.
What Florida is known for is not that framework, which is ordinary. It is a single provision about companies with one owner. In 2010 the Florida Supreme Court decided Olmstead v. Federal Trade Commission. It held that a charging order was not the exclusive remedy a judgment creditor could use against an interest in a single member LLC.
The Legislature answered the following year, and the answer now sits in Fla. Stat. § 605.0503(4) to (6). It did not restore protection for the sole owner. It confirmed the exposure and, in the same breath, closed the door for everybody else.
The agreement itself is never filed. Nothing goes to the Division of Corporations at sunbiz. There is no form and no fee for it. Our Florida operating agreement page covers the drafting.
What Chapter 605 does when the agreement says nothing
Florida follows the capital rather than the head count. That distinguishes it from most uniform act states. Section 605.0404(1) covers distributions made before dissolution and winding up. They must be shared on the basis of the agreed value of the contributions made by each member and person dissociated as a member, as stated in the company's records. Section 605.0404(5) allocates profits and losses the same way.
Voting matches. Section 605.04073(1)(b) makes each member's vote proportionate to that member's then current percentage or other interest in the profits of the company. Then Florida does something unusual. Under § 605.04073(1)(c), the affirmative vote or consent of a majority in interest is required to undertake an act, whether within or outside the ordinary course of the company's activities and affairs. Most states demand unanimity outside the ordinary course. Florida does not.
Only two things need everyone. Section 605.04073(1)(d) allows the operating agreement and the articles of organization to be amended only with the affirmative vote or consent of all members. And § 605.0701(2) dissolves the company only on the consent of all the members. So a majority in interest can sell a Florida LLC with no agreement. Nothing less than everybody can amend it or wind it up.
Why a Florida sole member has the most exposure
Section 605.0503(3) makes the charging order the sole and exclusive remedy, except as provided in subsections (4) and (5). Subsection (4) is the exception, and it applies only to a company with one member. Say a judgment creditor establishes to the satisfaction of a court that distributions under a charging order will not satisfy the judgment within a reasonable time. The charging order is then not the sole and exclusive remedy, and the court may order the sale of the interest pursuant to a foreclosure sale.
The creditor may make that showing at any time after judgment. That includes the same moment as applying for the charging order.
Subsection (5) sets out what the buyer gets. It is the member's entire limited liability company interest, not merely the rights of a transferee. Membership itself comes with it, and the former owner ceases to be a member. Section 605.0602(3) then treats that person as dissociated.
A written agreement cannot switch off subsection (4). What it can do is make the reasonable time showing harder. Document a genuine distribution policy adopted before any judgment. The agreement can also supply the separateness record that keeps the argument off the equitable ground § 605.0503(7)(c) expressly preserves. Our single-member LLC guide covers the operating discipline.
What Belongs in a Florida Operating Agreement
The Florida position in one table
| Question | Florida answer |
|---|---|
| Required by statute? | No |
| Must it be written? | No. An oral or implied agreement of all members counts |
| Filed with the state? | No. No form, no filing, no fee |
| Governing act | Florida Revised Limited Liability Company Act, Chapter 605 |
| Statement of authority filing? | Yes, optional, and it expires after five years |
| Series LLCs | Not available under Chapter 605 |
| File.Business custom agreement | $97 flat |
Ten clauses carry the weight in Florida. Several of them exist because Chapter 605 chose an unusual default.
1. Members, profits interests and the company's records
Name the members and fix the percentage interest in profits. Under § 605.04073(1)(b) every vote is measured against it. Then record the agreed value of contributions, because § 605.0404(1) reads the records directly when it splits the money.
2. Contributions and the consequence of not funding
Record contributions and agreed values. Section 605.0105(6) lets the operating agreement provide specific penalties or specified consequences where a member fails to comply with the agreement. Those include the consequences that § 605.0403(5) sets out. That is the hook for dilution, subordination or a forced sale on an unfunded capital call.
3. Member managed or manager managed
Decide and say so. Then set what the manager may do alone. In a manager managed Florida LLC, § 605.04073(2)(d) still requires a majority in interest of the members for an act outside the ordinary course. So the manager's mandate has a statutory ceiling unless the agreement raises it.
4. Thresholds, especially for a sale
This is the Florida specific clause most companies need. Section 605.04073(1)(c) lets a majority in interest approve an act outside the ordinary course. That includes selling the business. If the members want a supermajority or unanimity for a sale, the agreement has to say so. Florida will not supply it.
5. Allocation and distribution
This clause displaces § 605.0404(1) and (5). Separate the allocation of taxable income from the timing of cash. Then set a distribution policy deliberately. In Florida that policy is also part of the answer to a future charging order.
6. Transfers, consent and involuntary events
A transferee under § 605.0502 takes distributions and no management rights. Add a consent gate and a right of first refusal. Then handle divorce, death and judgment separately from a voluntary sale, with a stated price rather than a negotiation.
7. Admission, dissociation and buyout
Section 605.0404(2) confirms that dissociation does not entitle a person to a distribution. And § 605.0602 lists the events that dissociate a member, including death. Without a buyout clause the estate of a deceased Florida member holds an interest indefinitely, with no seat and no exit.
8. Dissolution triggers and the payout order
Section 605.0105(3)(i) prevents the agreement varying the grounds for dissolution that § 605.0702 sets. It expressly permits a deadlock resolution mechanism. Section 605.0701(2) requires all members to consent to a voluntary dissolution. Write the triggers you want and the waterfall. See our Florida dissolution guide for the filings.
9. Federal election and the Florida filings
Florida has no personal income tax, so the federal election drives the outcome for most members. Say who signs Form 2553 or Form 8832 and who may revoke it. Then name who is responsible for the annual report. It is due by May 1 and is covered in our Florida annual report guide.
10. Disputes, forum and amendment
Section 605.0105(3)(k) stops the agreement unreasonably restricting a member's right to bring an action. And § 605.0105(3)(l) limits how far you may vary the special litigation committee rules. Within that, set a forum and an amendment threshold. Remember that § 605.04073(1)(d) requires all members to amend unless the agreement provides otherwise. Changing the public record is separate and covered in amending Florida articles.
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Olmstead, and the Answer Florida Wrote Into Section 605.0503
The 2010 decision in Olmstead v. Federal Trade Commission concerned a judgment against the owner of single member Florida LLCs. It held that the charging order provisions of the then current act did not preclude a court from ordering the surrender of the entire interest. The 2011 legislative response was carried into Chapter 605 when the revised act was enacted. It produced the four subsections that now define Florida planning.
Section 605.0503(3) makes the charging order the sole and exclusive remedy, subject to subsections (4) and (5). Section 605.0503(4) restores foreclosure against a sole member on a showing that distributions will not satisfy the judgment within a reasonable time. Section 605.0503(5) gives the buyer the entire interest and membership.
And § 605.0503(6) is the sentence multi member Florida companies should know by heart. In the case of a limited liability company that has more than one member, the remedy of foreclosure on a judgment debtor's interest, or against rights to distribution, is not available to a judgment creditor and may not be ordered by a court.
Two members, no foreclosure, ever. One member, foreclosure on a showing. That is a sharper line than any other state in this region draws. It is why Florida advisers spend so much time on whether a second member is real.
Section 605.0503(7) then sets the limits of the protection. Nothing in the section limits the rights of a consensual secured creditor, the law of fraudulent transfers, or the equitable principles of alter ego, equitable lien and constructive trust. A Florida LLC operated as a personal checkbook does not get to hide behind subsection (6).
How Far Florida Lets You Modify Duties
Florida sits between California and Delaware. Section 605.0105(3)(e) says the operating agreement may not eliminate the duty of loyalty or the duty of care that § 605.04091 imposes. Subsection (4) is the exception. Section 605.0105(3)(f) preserves the obligation of good faith and fair dealing, allowing only prescribed standards that are not manifestly unreasonable. Section 605.0105(3)(g) bars relieving or exonerating anyone from liability for conduct involving bad faith, willful or intentional misconduct, or a knowing violation of law.
Subsection (4)(c) then opens the door, where the term is not manifestly unreasonable. The agreement may alter or eliminate the aspects of the duty of loyalty that § 605.04091(2) sets out. It may identify specific types or categories of activities that do not violate the duty of loyalty. It may alter the duty of care, short of authorizing willful or intentional misconduct or a knowing violation of law. And it may alter or eliminate any other fiduciary duty.
Section 605.0105(4)(a)(1) also lets the agreement specify how a conflicted transaction is authorized or ratified by disinterested and independent persons after full disclosure.
Section 605.0105(5) fixes the standard of review. The court decides manifest unreasonableness as a matter of law. It judges the term as of the time it became part of the agreement, considering only the circumstances existing then. It may invalidate the term only if it is readily apparent that its objective is unreasonable, or that it is an unreasonable means to that objective. So draft accordingly: put the commercial purpose of a hard clause inside the clause.
Three Florida Companies in Practice
Example one: Coral Gables Aesthetic Group, Miami-Dade
Three clinicians held a practice. Two together held fifty eight percent of the profits interest and wanted to sell to a consolidator for $3.2 million. The third, holding forty two percent, refused. In most states an act outside the ordinary course requires unanimity, and she would have blocked it. Section 605.04073(1)(c) requires only a majority in interest, so the sale proceeded without her consent. She learned the threshold at the letter of intent stage. A supermajority clause would have given her the veto she assumed she had.
Example two: Sarasota Bay Charter Fleet, Sarasota
Two members ran a fishing and sunset charter business with four vessels worth about $1.1 million. One picked up a $265,000 personal judgment after a road accident. The company had two genuine members, so § 605.0503(6) removed foreclosure from the table entirely. The creditor's only route was a charging order against distributions. The written agreement's distribution policy, adopted three years earlier, did the rest of the work.
Example three: Winter Park Property Partners, Orange County
A sole owner held four commercial units worth roughly $2.8 million in one Florida LLC. A $380,000 judgment followed. Section 605.0503(4) let the creditor argue that distributions would not satisfy the judgment within a reasonable time. And § 605.0503(5) would have transferred the entire interest and membership on a sale.
Florida has no series LLC. So the owner restructured into four Florida LLCs beneath a multi member holding company. The owner filed a statement of authority under § 605.0302 for each property, and documented distributions from that point forward.
Five Mistakes That Cost Florida Members Money
Mistake 1: Assuming a sale needs everyone
This is the Florida trap. Templates written for uniform act states assume unanimity outside the ordinary course. Florida requires only a majority in interest under § 605.04073(1)(c). A minority member who never negotiated a supermajority clause has no veto over a sale of the business, and finds out at closing.
Mistake 2: Skipping it because there is one member
The Florida sole member is the one owner in the country whose statute names them specifically for worse treatment. Section 605.0503(4) and (5) apply only to a one member company. The written agreement is where the distribution policy and the separateness record live. Both are part of the answer when a creditor makes the reasonable time showing.
Mistake 3: Adding a member on paper only
The whole of § 605.0503 turns on member count. So a nominal second member with no capital, no economics and no role is the most examined fact in a Florida creditor dispute. Section 605.0503(7)(c) preserves alter ego and constructive trust arguments precisely for that situation. If you add a second member, admit them properly. Amend the agreement, adjust the profits interests and record the contribution.
Mistake 4: Trying to file it on sunbiz
There is no Florida filing for an operating agreement. There is no form and no fee, and the Division of Corporations will not accept one. Your public filings are the articles of organization, the annual report due by May 1, your Florida registered agent designation and, if you choose, a statement of authority.
Mistake 5: Letting the statement of authority expire quietly
Section 605.0302 lets a Florida LLC file a statement naming who may transfer real property held in the company name, and who may otherwise bind the company. And § 605.0302(6) makes a recorded grant conclusive in favor of a person giving value in reliance.
But § 605.0302(10) cancels an effective statement by operation of law. That happens five years after it, or its most recent amendment, becomes effective, without any recording. A company that relies on a statement filed six years ago is relying on nothing. Put the renewal date in the agreement and in the compliance calendar.
What Happens Financially When Chapter 605 Decides Instead
Florida charges no penalty for a missing operating agreement, because the state never asked for one. The cost lands elsewhere. The figures below are arithmetic on the facts stated rather than a survey of professional fees.
The largest exposure is the sale threshold. On the Coral Gables facts, a forty two percent holder had no vote against a $3.2 million transaction she opposed. Her share of the proceeds was set by a deal she did not negotiate.
The second is the creditor position of a sole owner. Under § 605.0503(5), on the Winter Park facts, a $380,000 judgment threatened the entire interest in $2.8 million of property. The same judgment against a two member company would have been limited to a charging order by § 605.0503(6).
The third is the lapsed statement of authority. A closing collapses because the document a title company relied on expired under § 605.0302(10). The fourth is the account. Florida banks ask a multi member company for the operating agreement. Trade through a personal account while governance is sorted and you build exactly the commingling record that § 605.0503(7)(c) invites a creditor to use. If the entity has been administratively dissolved, handle reinstatement before the meeting.
What Florida Banks and Counterparties Ask For
Expect a request for the filed articles of organization, the EIN letter, beneficial owner identification and the operating agreement. Florida lenders read the agreement for signature authority. For real property transactions a title company will look for a statement of authority under § 605.0302, with a certified copy recorded in the county where the property sits. That matters because § 605.0302(7) then deems all persons to know of any limitation it contains.
The same file supports separateness. Florida courts asked to disregard an LLC examine separate accounts, real capital, decisions made by the body the agreement names, and distributions that were authorized rather than assumed. And § 605.0503(7)(c) keeps those equitable arguments expressly available to a creditor. Trading outside Florida means producing the documents again for foreign qualification, usually with a Florida certificate of status attached.
How File.Business Drafts Florida Operating Agreements
Two questions come first in Florida. How many members does the company really have, since § 605.0503 turns on it? And what threshold should apply to a sale, since § 605.04073(1)(c) sets a low one?
From there the intake covers profits interests and contribution values. It covers the distribution clause that displaces § 605.0404(1), transfer and buyout terms, and the death and dissociation consequences that § 605.0602 brings. It covers whether a statement of authority is worth filing and when it must be renewed. And it covers any duty modification, drafted with its purpose stated so § 605.0105(5) has something to weigh.
Free templates against a drafted Florida agreement
The characteristic template failure in Florida is a uniform act document that assumes unanimity for a sale and equal shares for distributions. Chapter 605 provides neither. The second is a Delaware style total fiduciary waiver that § 605.0105(3)(e) does not permit. A drafted agreement names the Florida sections it is displacing. Trading under another name needs a Florida fictitious name registration. Changing agents is covered in changing a Florida registered agent, and the general framework is in operating agreement essentials.
Florida Operating Agreement FAQ
Does Florida require an LLC to have an operating agreement?
No. The Florida Revised Limited Liability Company Act contains no requirement to adopt one. Fla. Stat. § 605.0105(2) provides that the chapter governs any matter the operating agreement does not address. That is the only consequence of going without.
Do I file the operating agreement with sunbiz?
No. There is no filing, no form and no fee for the operating agreement itself. The articles of organization, the annual report, and the optional statement of authority under Fla. Stat. § 605.0302 are the filings the Division of Corporations accepts.
What did Olmstead change for Florida LLCs?
In 2010 the Florida Supreme Court decided Olmstead v. Federal Trade Commission. It held that a charging order was not the exclusive remedy against an interest in a single member LLC. The Legislature responded in 2011, and the rules now sit in Fla. Stat. § 605.0503(4) to (6). Foreclosure is available against a sole member on a showing. It is unavailable against a company with more than one member.
Does a single-member Florida LLC keep charging order protection?
Only conditionally. Fla. Stat. § 605.0503(4) allows a court to order a foreclosure sale. The judgment creditor must show that distributions will not satisfy the judgment within a reasonable time. And § 605.0503(5) gives the purchaser the member's entire interest and membership itself.
Can a majority sell a Florida LLC business without the other members?
Yes, absent an agreement to the contrary. Fla. Stat. § 605.04073(1)(c) requires only the affirmative vote or consent of a majority in interest of the members. That covers an act within or outside the ordinary course. Only amending the agreement or the articles requires all members, under § 605.04073(1)(d).
How are distributions split in a Florida LLC with no agreement?
By capital. Fla. Stat. § 605.0404(1) shares distributions on the basis of the agreed value of the contributions made by each member, as stated in the company's records. And § 605.0404(5) allocates profits and losses the same way. Florida did not adopt the equal shares default used in several other states.
How long does a Florida statement of authority last?
Five years. Fla. Stat. § 605.0302(10) covers an effective statement of authority. Unless it is canceled earlier, it is canceled by operation of law five years after the date on which the statement, or its most recent amendment, becomes effective. That cancellation operates without any recording.
Need a custom Florida Operating Agreement?
File.Business drafts Florida-specific Operating Agreements at $97 flat: customized for single-member or multi-member structure, ownership percentages, capital contributions, tax election preferences, and management structure. Includes member-signature template and document-vault storage.
Doing this in Florida specifically: our Florida operating agreement page covers the drafting itself, including the sale threshold Chapter 605 sets low and the distribution policy that supports a charging order position.
Every statutory reference on this page was read in the Florida Statutes on the Legislature's own site. Sections are amended each session. Confirm the current text before you rely on it.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
