Business Formation

Goza and Hall P.A. assists clients in a range of business planning and organizational matters.  Our attorneys help entrepreneurs structure their businesses in a manner that best suits their needs and protects them from legal and financial liabilities.  As businesses grow, we offer comprehensive legal support that accommodates all stages of business progression.  During our decades of practice, we have amassed a wealth of knowledge regarding:

  • Limited Liability Companies (LLCs)
  • Family Limited Partnerships (FLPs)
  • Corporations
  • Buying and selling of businesses
  • Asset/stock sales
  • Contractual issues
  • Buy-sell agreements

Limited Liability Companies

In June, 2010, the Florida Supreme Court issued an opinion concerning limited liability companies in the State of Florida. The majority opinion held that a court may require a judgment debtor to surrender all right, title and interest in the debtor’s single-member limited liability company to satisfy an outstanding judgment. This created quite a concern to members of limited liability companies in the State of Florida since the existing law had always been that a creditor’s only recourse against a limited liability company, whether it was a single-member or a multi-member, would be to get a charging order against the limited liability company. A charging order only allowed the creditor to get any distributions from the limited liability company, and if the owner of the limited liability company did not make any distributions to the individual members, then the creditor got nothing. The effect of the Supreme Court decision changed that to allow creditors to reach a single-member limited liability company’s assets. In addition, the opinion did not expressly limit the applicability to single-member limited liability companies. This created more uncertainty in connection with multi-member limited liability companies in the State of Florida.

Due to the concern rendered by this decision and its effect on making Florida less favorable for companies to do business in the State as limited liability companies, the Florida Legislature has now passed a law effective May 31, 2011, to change the effect of the holding in that Supreme Court case and to clarify that the current law does not extend to a member of a multi-member limited liability company organized under Florida law for a multi-member limited liability company in Florida. The prior existing law still applies which only allows a judgment creditor to obtain a charging order against the limited liability company’s interest of the judgment debtor.

In the case of a limited liability company having only one member, the new law requires the judgment creditor to go to Court to establish to the satisfaction of the court that distributions under a charging order will not satisfy the judgment within a reasonable time, and request the court to order the sale of that interest in the limited liability company pursuant to a foreclosure sale. With the court order of a foreclosure sale of the judgment debtor’s interest in the single-member limited liability company, then the purchaser of a court-ordered foreclosure sale can obtain the single member’s entire limited liability company interest and become the member of the limited liability company.

The new law now protects and clarifies that the only remedy of a judgment creditor in a multi-member limited liability company is to obtain a charging order. There is still the exposure to single-member limited liability companies, however, a judgment creditor must establish to a Florida court that a charging order will not satisfy the judgment, and that such charging order is not an exclusive remedy against a debtor who is the sole member of a limited liability company. This addition to the Statute at least requires a court to review the matter and make a decision, and gives an opportunity for a member of a single-member limited liability to contest any action by a judgment creditor to obtain a foreclosure sale.