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Company agreements in Florida are extremely important. The purpose of the company agreement is put memorialize the operation of the business and the agreements between the owners of the business. The number one reason why partner’s dispute arise is because they never put their agreement in writing.
Depending on the business entity, the agreement will have a different name. Partnership has Partnership Agreements, Limited Liability Companies (LLC’s) have the Operating Agreement, and Corporations have Bylaws.
Compared to Partnerships and Limited Liability Companies, the Corporation is required to have Bylaws according to Florida law. If the LLC does not have an Operating Agreement then the Florida Revised Limited Liability Act will govern any disputes.
If the entity does not have any agreements, then it is susceptible to claims of creditors arguing that the entity is a sham because the formalities of the business entity are not being followed. In legal terms this is called “piercing the corporate veil.”
The entity agreement can save many owners disputes. It will outline all the operations of the company like how distributions will be made, who will make decisions, and what happens when there is a dispute.
On top of the Entity Agreement, it is also advisible for the Members/Partners/Shareholders to also have an agreement between each other.
The purpose of these documents is to add protection to the owners and to other classes of owners that the company may bring. It can also cover the intent of the owners and best practices.
In most situations the Owner’s Agreement will include Buy-Sell Provisions if the Entity Agreement does not already have it.
We can review or create any Entity and Owners Agreements. We often find that they are lacking important provisions or they were not created to begin with.
Call us today at (305) 489-1415 or complete the form in this page for a free consultation.