A look at significant changes to Chapter 607 of Florida’s state statutes, based largely on the ABA’s revised Model Business Corporations Act.
Effective January 1st, 2020, House Bill 1009 significantly amended the Florida Business Corporation Act (FBCA) . This legislation applies to Florida domestic and foreign qualified corporations.
Below are some highlights of the revised act.
Florida Corporate Filing Changes
Regarding corporate name filings, a name may now be reserved for a non-renewable 120-day period. While a name was previously required to be distinguishable from other names on the state’s record, an exception – under the revised FBCA – is that a corporation may now register under a name not distinguishable (but not identical) from another entity’s name on record with the filed written consent of the other entity upon registration.
The revised FBCA allows Articles of Correction to be filed at any time, where filing was previously limited to within 30 days of the corrected document’s filing date. Articles of Incorporation may now include a prior effective date that is within five days before the date of filing.
Revisions Pertaining to Corporate Governance
Similar to changes seen earlier this year in Delaware, the revised FBCA expands the use of electronic signatures and electronic transmissions and allows for electronic notice and virtual meetings. Note that this may first require amendments to bylaws and consent.
Under previous versions of the corporate statutes, derivative actions required a ‘universal demand’ by shareholders to the Board of Directors as a prerequisite to filing a lawsuit. With the effective revisions to the FBCA, shareholders may be able to bypass the universal demand step for claims alleging breach of fiduciary duties of directors, if they demonstrate that it is unlikely that the board would act on behalf of shareholders.
Corporate Domestication Expansion
The revisions to FBCA made by HB 1009 expanded a previously limited domestication provision. Florida corporations are now permitted to domesticate into foreign corporations and vice versa, provided that in either instance, the laws of the foreign corporation’s jurisdiction allow the domestication. Prior to the revision, Florida corporations could not domesticate into foreign corporations under FBCA.
These are just a few of the changes to Florida’s Business Corporation Act that took effect on January 1st, 2020. You may want to review all of the changes to the FBCA to determine, among other things, if any amendments to Articles of Incorporation or bylaws are necessary.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.