What Standards of Conduct Apply to Florida LLC Managers?

The duty of loyalty includes three obligations. The manager or member must account to the company, and hold as trustee for it, any property, profit or benefit derived in the conduct or winding up of the company's activities, from use of company property, or from appropriation of a company opportunity. The manager or member must also refrain from dealing with the company as, or on behalf of, a person with an interest adverse to the company, except for a transaction that meets the statutory requirements for such transactions, and must refrain from competing with the company before its dissolution.

The duty of care is limited. It requires refraining from grossly negligent or reckless conduct, willful or intentional misconduct, or a knowing violation of law. Conduct that also furthers the person's own interest is not a violation for that reason alone.

Reliance on others is allowed within limits. A manager or member may rely on information, reports and financial statements from members or employees reasonably believed to be reliable and competent, from lawyers, accountants or other professionals on matters within their competence, or from a committee the person is not part of and reasonably believes merits confidence. Reliance is not in good faith if the person has knowledge that makes it unwarranted.

Decisions may weigh factors such as the company's long term prospects and the effects on employees, suppliers, customers and communities. How management is assigned is explained in member managed and manager managed LLCs in Florida.