Creating a limited liability company (LLC) can be an excellent way to organize your Florida business and structure its operations and ownership interests. LLC owners (members) will have a financial stake in the enterprise. One way these LLC ownership interests can be expressed is through LLC membership units. Here is more on understanding Florida LLC membership units.
Florida LLC Ownership Interests
When a limited liability company is formed, ownership interests are divided among its members. In Florida, these types of entities are governed by the Florida Revised Limited Liability Act.
Investors in an LLC are referred to as “members,” and membership interests represent their ownership stake in the organization. Ownership interest in a limited liability company (LLC) can be expressed in membership units or by a percentage.
LLC membership units and percentage ownership can allow members to share in LLC profits and have voting rights. LLC unit membership rights and privileges are typically set out in the LLC’s operating agreement. There are benefits to each type of ownership. However, the focus of this discussion will be on understanding Florida LLC membership units.
What are Florida LLC Membership Units?
Florida LLC membership units are similar to shares of stock in a corporation. LLC membership units can be an essential part of assigning LLC ownership interests and governing the enterprise. These units fluctuate in value based on the member’s capital contributions, distributions and losses taken. A member’s units can decrease in value when a member assumes an LLC liability.
LLCs can have different types of classes of membership interests that allow the organization to allocate profits and voting rights in a specific manner. Therefore, LLC membership units may be in different categories, such as voting and non-voting, as provided in the entity’s operating agreement. For instance, the LLC operating agreement could state that founding members have preferred units with voting rights while allowing for other common membership units that are allocated to employees and other members to be non-voting.
LLC Operating Agreements
An LLC’s member ownership interests should be clearly defined in the entity’s operating agreement. Further, the rights associated with membership units should also be evident from the LLC contract. If you plan on forming an LLC, it’s essential that you work with an experienced Florida business attorney when creating your organization’s operating agreement. Your lawyer can help you develop a governing document that clearly establishes member ownership interests and other key terms you will need to support your LLC’s success.
Working with an Experienced Florida Business Attorney
The best way to ensure that your Florida LLC membership interests are properly established is by working with an experienced Florida business attorney. In addition, your Florida business lawyer can help you develop an operating agreement for your Florida LLC that contemplates your vision for the enterprise.
At the Florida Small Business Legal Center, we understand what it takes to help create and support a Florida LLC. We can help you explore your business structure options and determine the type that will benefit your organization and meet its goals. If you decide an LLC is your preferred business structure, we can help you create an operating agreement and other important legal documents you will need to support your business.
Contact an Experienced Florida Business Lawyer
Attorney Richard Sierra at the Florida Small Business Legal Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.