What Is the Difference between Member Managed and Manager Managed LLCs in Florida?

Section 605.0407(1) sets member management as the default. An LLC becomes manager managed only if the operating agreement or articles of organization expressly state that the company is or will be manager managed, is or will be managed by managers, or that management is or will be vested in managers. Words of similar import also work. The statute states that, unless the context requires otherwise, the terms managing member and managing members do not, by themselves, count.

In a member managed LLC, section 605.0407(2) vests management and conduct of the company in the members, except as chapter 605 expressly provides otherwise. In a manager managed LLC, subsection (3) states that a matter relating to the company's activities and affairs is decided exclusively by the manager or managers, again except as chapter 605 expressly provides.

Section 605.0407(4) adds a pay rule for member managed companies. Without an agreement to the contrary, a member is not entitled to remuneration for services, except reasonable compensation for winding up. Under subsection (5), any LLC, whether member managed or manager managed, must reimburse a member for an advance beyond the capital the member agreed to contribute.

Under section 605.0407(1), the choice is made in the articles of organization or the company's operating agreement. More is on the business law practice page.