Florida Statutes 605.04093 – Limitation of liability of managers and members
Current as of: 2023 | Check for updates
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(1) A manager in a manager-managed limited liability company or a member in a member-managed limited liability company is not personally liable for monetary damages to the limited liability company, its members, or any other person for any statement, vote, decision, or failure to act regarding management or policy decisions by a manager in a manager-managed limited liability company or a member in a member-managed limited liability company unless:
(a) The manager or member breached or failed to perform the duties as a manager in a manager-managed limited liability company or a member in a member-managed limited liability company; and
Terms Used In Florida Statutes 605.04093
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Distribution: means a transfer of money or other property from a limited liability company to a person on account of a transferable interest or in the person's capacity as a member. See Florida Statutes 605.0102
- Interest: means :(a) A share in a business corporation;(b) A membership in a nonprofit corporation;(c) A partnership interest in a general partnership;(d) A partnership interest in a limited partnership;(e) A membership interest in a limited liability company;(f) A share or beneficial interest in a real estate investment trust;(g) A member's interest in a limited cooperative association;(h) A beneficial interest in a statutory trust, business trust, or common law business trust; or(i) A governance interest or distributional interest in another entity. See Florida Statutes 605.0102
- Manager: means a person who, under the operating agreement of a manager-managed limited liability company, is responsible, alone or in concert with others, for performing the management functions stated in ss. See Florida Statutes 605.0102
- Manager-managed limited liability company: means a limited liability company that is manager-managed by virtue of the operation of…. See Florida Statutes 605.0102
- Member: means a person who:
(a) Is a member of a limited liability company under…. See Florida Statutes 605.0102- Member-managed limited liability company: means a limited liability company that is not a manager-managed limited liability company. See Florida Statutes 605.0102
- Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or another legal or commercial entity. See Florida Statutes 605.0102
- Property: means all property, whether real, personal, mixed, tangible, or intangible, or a right or interest therein. See Florida Statutes 605.0102
(b) The manager’s or member’s breach of, or failure to perform, those duties constitutes any of the following:1. A violation of the criminal law unless the manager or member had a reasonable cause to believe his, her, or its conduct was lawful or had no reasonable cause to believe such conduct was unlawful. A judgment or other final adjudication against a manager or member in any criminal proceeding for a violation of the criminal law estops that manager or member from contesting the fact that such breach, or failure to perform, constitutes a violation of the criminal law, but does not estop the manager or member from establishing that he, she, or it had reasonable cause to believe that his, her, or its conduct was lawful or had no reasonable cause to believe that such conduct was unlawful.2. A transaction from which the manager or member derived an improper personal benefit, directly or indirectly.3. A distribution in violation of s. 605.0406.4. In a proceeding by or in the right of the limited liability company to procure a judgment in its favor or by or in the right of a member, conscious disregard of the best interest of the limited liability company, or willful misconduct.5. In a proceeding by or in the right of someone other than the limited liability company or a member, recklessness or an act or omission that was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.(2) As used in this section, the term “recklessness” means acting or failing to act in conscious disregard of a risk known, or a risk so obvious that it should have been known, to the manager in a manager-managed limited liability company or the member in a member-managed limited liability company, and known to the manager or member, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such action or failure to act.(3) A manager in a manager-managed limited liability company or a member in a member-managed limited liability company is deemed not to have derived an improper personal benefit from any transaction if the transaction has been approved in the manner as is provided in s. 605.04092 or is fair to the limited liability company as defined in s. 605.04092(1)(c).(4) The circumstances set forth in subsection (3) are not exclusive and do not preclude the existence of other circumstances under which a manager in a manager-managed limited liability company or a member in a member-managed limited liability company will be deemed not to have derived an improper benefit.