What was your New Year’s resolution for your company or your career? If it was to finally move forward with new startup venture or expand your growing business, you need to consult with a business attorney sooner than later. Getting advice from a business attorney early in your development process can help your business troubleshoot several key legal issues and concerns that you will face in 2014.
Even if 2014 looks like “business as usual” your management should still consult with a business attorney annually for a checkup and review of your business structure and your business documents. If your company is offering a new product line, bringing on investors, shaking up your officers or directors, or expanding into new territories, your old business entity, structure and founding documents may no longer suit your plans and an experienced business attorney should be called upon help you make the necessary changes.
In Florida, as in many other states, the Limited Liability Company (LLC) business structure is very popular for startups and growing companies, but be aware that their inner workings are not particularly simple. Beware: a tremendous amount of misinformation exists regarding LLCs, and how they function, so it is important that you work with a business attorney to fully understand how your new business operates.
Also be very cautious about getting your business legal advice from legal websites, well-meaning friends, or those “incorporation service companies.” None of them will likely tell you that Florida completely changed its LLC laws in 2013, and it is now titled the Florida Revised Limited Liability Company Act.
For example, effective January 1, 2014, the following changes will take effect:
- On January 1, 2015, the existing Florida Limited Liability Company Act (the “Existing Act”) will be repealed completely.
- Existing LLCs that are managed by a managing member are deemed to be member-managed (as opposed to manager-managed).
- Absent an agreement, a member in a member-managed LLC is not entitled to compensation for its services, except for reasonable compensation for serviced rendered to wind up the LLC.
- A member who advances funds to an LLC is entitled to reimbursement.
By the way, you can find lots more information about the new law here.
FINALLY, if you are considering going into business with any partners, especially family members and friends, you absolutely should create a legally enforceable written agreement for guidance. Running a business is stressful, and many relationships have soured when money or business is involved. Agreeing ahead of time about how you will handle the ups and downs of your new business venture, and how you will treat each other (whether you succeed or not) will will help protect both your business interest and your personal relationship.
The Law Office of Brandon Woodward P.A. is eternally grateful that you have visited our web site or read our blog. The materials and information contained here are provided for informational purposes only and are not to be considered as legal advice. For questions about startups or business entities, LLCs, or any other legal issues facing your business, EMAIL US, and we’ll give you a totally FREE consultation.