Florida LLC Agency Law

By Guest Contributor Gregory A. May, Esq. – www.kieselandmay.com


African-American and Indian young adult business women working together in office.


When you buy or sell a business, and limited liability companies are involved, it is important to understand who can obligate the businesses. Why? Well, first it is important to understand who can bind your company on contracts and various agreements. This is good information to have regardless of whether or not you are considering selling. Second, nobody wants to buy a business only to find out that the Seller was not authorized.


So how do we determine who is authorized to act on behalf of a LLC? The answer lies in Section 605.04074, Florida Statutes, which provides the framework for defining these issues; and the law varies depending on whether the Company has been set up to be a member-managed or manager-managed.


In the case of a member-managed company, it is assumed that a member may act on behalf of the company for the purpose of its activities and affairs. Acts of a member for those purposes are deemed to be authorized unless the person whom the member was dealing knew or had notice that the member lacked authority. However, any act not done in the ordinary course of business affairs binds the company only if the act was authorized by the appropriate votes of members. I would argue that the sale of a business or all of its assets is outside of the scope of its ordinary business affairs, and that is why we like to be sure that all members have executed or approved business sale agreements.


In manager-managed limited liability companies, actions by managers are deemed authorized if they are in the ordinary course of the business affairs, and the person with whom they were dealing had no notice that the manager was unauthorized. And actions by managers, not in the ordinary course of business, bind the company only if they are approved by appropriate vote of the members. However, it is important to note that a member is not an agent of the LLC for the purposes of its business solely by reason of being a member.


One way to resolve this issue is to file a statement of authority as defined in Section 605.0302, Florida Statutes. The other is to obtain a business law attorney to handle your closing. Happy negotiating and good luck in your new business!


*This communication is for informational purposes only and shall not be deemed formal legal advice or the formation of an attorney-client relationship.


greg may

Gregory A. May, Esq.
Kiesel and May, Attorneys at Law
2121 McGregor Boulevard
Fort Myers, Florida 33901
T: (239) 334-1800
F: (239) 332-3927



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12995 South Cleveland Avenue, Suite 249
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