Corporate Articles, Limited Liability Company Operating Agreements, and Partnership Agreements

What do business formation documents entail?

Drafting corporate articles, limited liability company (LLC) operating agreements, and partnership agreements involves creating legally binding documents that establish a business’s structure, governance, and operational rules. In addition, these documents outline the rights, responsibilities, and relationships between business owners and their stakeholders.

One example of when corporate executives or boards of directors may require counsel on drafting these documents is when they are forming a new business entity. In this case, the drafting process will ensure compliance with relevant Florida and federal statutes and regulations. Another example is when an existing business undergoes significant changes, such as restructuring or adding new partners or members. In these situations, the current documents may need to be revised or new agreements created to reflect the changes and maintain compliance with applicable laws.

Need help with a matter related to the drafting of business formation documents? Schedule your consultation today with a top corporate governance and operations attorney.

Which Florida and federal laws and regulations apply to business formation documents?

In Florida, several laws and regulations guide the drafting of business formation documents. For example, the Florida Business Corporation Act (FBCA) governs the formation and operation of corporations, while the Florida Revised Limited Liability Company Act (FRLLCA) addresses LLCs. In addition, the Florida Revised Uniform Partnership Act (FRUPA) and the Florida Revised Uniform Limited Partnership Act (FRULPA) apply for partnership agreements.

These statutes, along with federal laws and regulations, establish the requirements for drafting these documents, including mandatory, optional, and prohibited provisions. They also outline the default rules that apply without specific provisions in the agreements, the procedures for amending the documents, and the consequences of non-compliance.

By understanding and complying with these laws and regulations, businesses in Florida can ensure their corporate articles, LLC operating agreements, and partnership agreements are legally valid and provide a solid foundation for their ongoing operations and potential future transactions or dissolution.

What are common issues with business formation documents that lead to litigation?

The following issues are among the most common in litigation involving the drafting of business formation documents:

• Ambiguity and Vagueness: Unclear or ambiguous language in these documents can lead to confusion and disputes among the parties involved, which may result in litigation.
• Incomplete or Inaccurate Information: Omissions or inaccuracies in the documents can result in legal disputes over the true intent and understanding of the parties involved.
• Improper Execution: Failure to comply with required formalities for executing the documents (i.e., notarization or filing with the appropriate government agency) can lead to legal challenges and potential invalidation.
• Non-compliance with Laws and Regulations: Drafting documents that do not adhere to applicable federal and state laws and regulations can lead to legal disputes and potential penalties.
• Disputes Over Duties and Obligations: Misunderstandings or disagreements regarding the duties and obligations of the parties involved can lead to litigation.

What are effective measures to minimize the risk of litigation over the drafting of business formation documents?

Implementing the following strategies may help mitigate risk:

• Engage Competent Legal Counsel: Work with experienced attorneys specializing in corporate law and understand the applicable federal and state regulations.
• Conduct Thorough Research: Conduct comprehensive research on relevant laws, regulations, and industry-specific requirements to ensure the documents adhere to all legal requirements.
• Provide Clear and Concise Language: Draft documents using unambiguous language to avoid confusion or misinterpretation.
• Address Potential Disputes: Anticipate potential areas of conflict and address them in the documents, such as outlining dispute resolution procedures and clearly defining the roles and responsibilities of all parties.
• Ensure Proper Execution and Filing: Follow all required formalities for executing and filing the documents with the appropriate government agencies.
• Review and Update Documents Regularly: Periodically review and update the documents to ensure compliance with any changes in laws or regulations and to address any changes in the parties’ circumstances or business relationships.

When a set of facts is appropriate to meet litigation requirements, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path to seek appropriate remedies.

To determine whether your unique situation may necessitate litigation, please contact our office to set up your initial consultation.

Frequently Asked Questions

1. What are the most critical components of a well-drafted corporate article, LLC operating agreement, or partnership agreement?

Key components include defining the parties’ roles and responsibilities, specifying financial and ownership provisions, outlining dispute resolution mechanisms, and ensuring flexibility and adaptability.

2. Can a template or online service be used to draft corporate articles, LLC operating agreements, or partnership agreements?

While templates and online services may provide a starting point, it is essential to engage experienced legal counsel to ensure compliance with applicable laws and regulations, address the parties’ specific needs, and minimize the risk of future disputes.

3. How often should corporate articles, LLC operating agreements, or partnership agreements be reviewed and updated?

Regularly reviewing and updating these documents is crucial to accommodate changes in circumstances, such as new partners or members, changes in the business environment, or evolving legal requirements.

Have more questions about governance or operations for your business?

Crucially, this overview of the drafting of business formation documents does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to schedule a consultation.