2020 Updates to the Florida Business Corporation Act
The beginning of 2020 brought substantial changes to the Florida Business Corporation Act (“FBCA”). The revised FBCA was signed into law on June 7, 2019 by Governor DeSantis and became effective on January 1, 2020.
The FBCA has not had a substantial revision since it was first revised in 1989. A comprehensive overhaul of the FCBA was warranted to bring Florida’s corporate statute up to date with modern corporate statutory trends and developments. The amendments to the FBCA are modeled after the 2016 version of the Model Business Corporation Act, albeit with several certain deviations. The revised FBCA represents an extensive change to Florida law in 2020; some of these changes include:
- Various definition and language changes;
- Provides for the expansion of a minority shareholder’s appraisal rights;
- Provides for the reservation of a corporate name for 120 days;
- Provides for increased judicial discretion in dissolution matters;
- Addresses items that may be added to articles of incorporation and, at least in one case, one topic that cannot be included in the articles;
- Allows domestic entities, such as a domestic limited liability company, and foreign entities authorized to do business in Florida to act as registered agents; and
- Authorizes a court to remove a director in a derivative proceeding under certain circumstances.
Owners, shareholders, officers, and directors of Florida corporations should be cognizant of the FBCA revisions and how said changes could potentially impact their rights, duties, and obligations. If you are interested in learning more about the amendments to the FBCA please feel free to contact us.