Florida Transplants with Out-of-State Businesses May Need to Register Their Foreign LLC

If you’re operating a foreign Limited Liability Company (LLC) and looking to do business in Florida, it’s crucial to understand the state’s legal requirements. Florida’s statutes provide a comprehensive framework for foreign LLCs, which are entities formed outside of Florida but seeking to conduct business within the state. Here’s a detailed look at what foreign LLCs need to know about operating in Florida.

Key Provisions for Foreign LLCs

The regulations for foreign LLCs doing business in Florida are primarily found in Florida Statutes §§605.0901 through 605.0911. These sections align closely with the uniform act but include modifications to fit Florida’s Department of State (DOS) filing requirements. While the rules are largely similar to existing laws, they emphasize the necessity for foreign LLCs to obtain a certificate of authority before conducting business in the state.

Governing Law

One of the most important provisions for foreign LLCs is Florida Statutes §605.0901, which stipulates that the governing law for a foreign LLC is the law of the jurisdiction where it was formed. This law governs the LLC’s internal affairs and the liability of its members and managers for the company’s debts and obligations. This is particularly pertinent for foreign series LLCs operating in Florida, as the state does not recognize series LLCs.

For series LLCs, each series might be treated differently depending on the state of formation. Some states consider a series LLC as one legal entity, while others view each series within the LLC as separate entities. Florida requires each series within a series LLC to register as a separate filer to obtain a certificate of authority. This approach aims to ensure clarity and legal compliance but raises questions about how Florida courts will handle the liabilities of each series within a series LLC.

Certificate of Authority: A Mandatory Requirement

Florida Statute §605.0902 begins with a stern reminder: “A foreign limited liability company may not transact business in this state until it obtains a certificate of authority from the [d]epartment.” The process for obtaining this certificate involves meeting specified requirements, which are generally consistent with existing laws.

Activities Exempt from the Requirement

There are certain activities that do not constitute “transacting business” and thus do not require a certificate of authority. These exemptions include maintaining bank accounts, holding meetings of members or managers, and conducting activities related to internal corporate affairs.

Consequences of Non-Compliance

Operating without a certificate of authority has significant consequences. A foreign LLC cannot maintain a legal action in Florida courts without this certificate. However, lacking a certificate does not invalidate the LLC’s limited liability status, the legality of its contracts, or its right to defend itself in court.

Filing and Compliance Procedures

The statute clearly outlines the processes for:

  • Amending a Certificate of Authority (§605.0907)
  • Revoking a Certificate of Authority (§605.0908)
  • Withdrawing a Certificate of Authority (§605.0910)
  • Reinstating a Certificate After Revocation (§605.0909)

Additionally, the Department of Legal Affairs can take legal action to prevent foreign LLCs from conducting business in Florida if they violate these regulations.

Practical Steps for Foreign LLCs

  1. Obtain a Certificate of Authority: Before conducting any business in Florida, ensure your LLC obtains the necessary certificate from the DOS.
  2. Understand Governing Laws: Be aware that your LLC will be governed by the laws of the state of formation, especially concerning internal affairs and liabilities.
  3. Register Each Series Separately: If operating a series LLC, register each series as a separate entity to comply with Florida’s requirements.
  4. Stay Updated: Regularly review and amend your filings as necessary to remain in compliance with state regulations.

Conclusion

The legal landscape for foreign LLCs doing business in Florida is detailed and specific. Understanding and complying with these requirements is essential to avoid penalties and ensure smooth business operations. By obtaining the necessary certificates and understanding the governing laws, foreign LLCs can effectively navigate the regulatory environment in Florida. For further information, consult the Florida Department of State or legal professionals specializing in business compliance.

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