Changes to Florida Business Corporation Act in 2020: Everything You Need to Know
As a business owner in Florida, you have probably heard about the most recent changes to the Florida Business Corporation Act (FBCA). But do you actually know what has changed under House Bill 1009, effective January 1, 2020?
Under HB 1009, nearly every section of the FBCA was revised. However, many revisions were intended to adopt the structure of the Model Act as opposed to making any substantive changes.
We have reviewed some of the most notable changes to the Florida Business Corporation Act every business owner in the Sunshine State needs to know about. These revisions might affect business litigation in your case.
- Indistinguishable name. As under the old law, the FBCA requires the name of your business to be distinguishable from the names of other companies in the Department of State’s database. However, the revised version of the law permits registration under a name that would not be considered “distinguishable” as long as you obtain written consent from the other entity.
- Prohibited fee-shifting. The revised version of the FBCA prohibits imposing liability on shareholders for expenses of the corporation or another party as well as attorney fees related to an internal corporate claim.
- Unanimous shareholder agreements. Under the new law, shareholders are allowed to enter into unanimous agreements that govern relations between and among the shareholders and corporation, the exercise of corporate powers, and regulate the management of the business and affairs. Under the old law, such agreements were limited to corporations with at least 100 shareholders.
- Committees of the board of directors. The revised version of the Florida Business Corporation Act allows committees to consist of one or more directors. The old law required committees to consist of two or more. Also, the new version of the FBCA expands the authority and powers of committees.
- Authorized virtual meetings. The 2020 version of the Florida Business Corporation Act allows holding meetings by means of remote, virtual communication if the board of directors has the authority to determine the place of their shareholders’ meeting.
- Shareholder approval of the merger. Shareholder approval of the plan of a merger of a two-step acquisition is no longer required under the new law.
- Alternative to judicial dissolution. When the company’s directors are deadlocked in the management of a corporate affair, the new law allows the appointment of a custodian, receiver, or provisional director without having to seek judicial dissolution.
These are just some of the revisions in the 2020 version of the Florida Business Corporation Act that may be valuable to business owners, shareholders, and other parties and professionals. You may want to review the entire Act to make sure that your business is in compliance with any new restrictions and requirements under the FBCA.
Speak with a lawyer to determine how the revised FBCA might affect your commercial litigation suit in Florida. Consult with a West Palm Beach business litigation attorney to determine if any revisions in the Act affect your corporation, business, or pending legal action. Contact Pike & Lustig, LLP, to evaluate your case. Call at 561-291-8298 today.