The buyer’s diligence team had been running for three weeks on a Florida LLC target — a multi-member, manager-managed entity in the logistics-services business. The deal was a straight equity purchase, all members were selling, and the deal documents had been negotiated against the assumption that member consent under Florida’s Revised LLC Act would govern the closing mechanics. The seller’s counsel had delivered a clean closing certificate confirming that each member had signed off on the sale. The buyer’s M&A counsel had reviewed Chapter 605 of the Florida Statutes and was satisfied that majority-in-interest member consent was sufficient. Closing was scheduled for the following Friday.
On Tuesday, the buyer’s M&A associate pulled the target’s operating agreement out of the data room to confirm a tangential point about distribution waterfalls. She read it through, noticed an unusual provision tucked into the “Transfers” article, and walked it into my office to ask whether it meant what she thought it meant. It did. The operating agreement, which had been amended in 2019 to accommodate a venture investor who had since exited, contained a supermajority-consent provision that required eighty-five percent member approval for any “sale, exchange, or other disposition of substantially all of the company’s assets, including by way of sale of equity interests representing a majority of the membership interests.” The members holding fifteen percent of the equity had not yet signed off on the deal. The deal documents required them to sign.
By Wednesday afternoon, the holdout member — a passive investor who had not been actively engaged in the company’s affairs for years and who had not been included in the deal-team distribution list — was on the phone with his own counsel, evaluating his leverage. The closing slipped by six weeks. The deal eventually closed at a price that included a meaningful concession to the holdout member, who had used the supermajority-consent provision as a holdup right.
This pattern shows up repeatedly in Florida LLC deals. Florida’s corporate-governance jurisprudence on operating-agreement overrides — and Delaware’s, which influences Florida practice — has consistently confirmed that the operating agreement controls over the default statutory rules in most areas where the statute permits modification. Chapter 605 of the Florida Statutes is the starting point, not the ending point. The operating agreement is the ending point, and Florida operating agreements are often more idiosyncratic than the standard-form versions buyers’ counsel encounter in Delaware deals.
What Chapter 605 actually says on member consent
Florida’s Revised LLC Act, enacted in 2013 and meaningfully amended in 2025, contains a default rule that the sale of substantially all of an LLC’s assets requires the consent of members owning a majority of the membership interests (subject to some structural exceptions). Mergers and conversions have a similar default — majority-in-interest consent absent a different rule in the operating agreement. The 2025 amendments I wrote about earlier — particularly around member-consent thresholds for certain transactions — sit on top of this default and modify it in specific cases.
The critical statutory point that buyers’ counsel sometimes miss is that almost every consent threshold in Chapter 605 is a default that the operating agreement can override. The statute is permissive: parties can contract for higher or lower thresholds, can impose super-majority requirements, can give individual members veto rights, can impose specific procedural requirements, and can carve out particular transactions from the default rules. Florida’s approach is broadly similar to Delaware’s on this point — the operating agreement is the controlling instrument, and the statute fills in only where the operating agreement is silent.
What that means practically is that the diligence question is never “what does the statute require?” The diligence question is always “what does the operating agreement require, and what does the statute add if the operating agreement is silent on a particular point?” Buyers’ counsel who answer the first question without answering the second find themselves at closing with the kind of fact pattern I described above — a clean statutory analysis, a clean closing certificate, and a holdout member with a contractual veto the deal team did not catch.
The provisions that hide in Florida LLC operating agreements
Three categories of provisions surface most often in Florida LLC operating agreements and most often produce closing surprises. The first is super-majority consent thresholds for major transactions. These get added during financing rounds, often at the request of preferred-equity investors or strategic minority partners who want a contractual veto. The thresholds vary — seventy-five percent, eighty percent, eighty-five percent, ninety percent, sometimes unanimous — and they typically attach to “Major Decisions” or “Major Transactions” lists that include sales, mergers, refinancings, and material asset dispositions.
The second is class-specific voting rules. Florida LLCs are often structured with multiple classes of membership interests — Class A common, Class B common, preferred, profits interests — and the operating agreement may give each class a separate consent right on transactions affecting that class. The deal that has majority-in-interest consent measured against the aggregate may still lack the class-by-class consent that the operating agreement requires. The closing certificate that confirms aggregate consent is not the same document as the closing certificate that confirms each class has consented.
The third is right-of-first-refusal and tag-along provisions that constrain transfers of membership interests. These are often drafted to apply to “any transfer” of interests, and the standard form makes no distinction between a transfer in connection with a sale of the company and a transfer in any other context. A sale of one hundred percent of the equity may technically be a “transfer” that triggers each individual member’s right-of-first-refusal — which, if not waived, can entitle non-selling members to step into the deal and acquire the interests at the proposed price. In practice these provisions get waived as part of the deal, but the waiver process is procedural and takes time, and if the operating agreement requires the waiver to be in writing signed by each affected member, the deal team has to actually go get the signatures rather than rely on a general member-consent vote.
The diligence sequence that catches the problems
The diligence sequence that consistently catches these provisions is straightforward and routinely skipped. First, request the operating agreement (and every amendment to it) on day one of diligence. Florida LLCs sometimes have side letters, member-consent agreements, or written consents that operate as de facto amendments to the operating agreement without being formally incorporated into it; request those too. Second, have the deal team’s most junior associate read the entire operating agreement, cover to cover, with no other distractions and no shortcuts. The supermajority-consent provision that derailed the deal above was in the operating agreement’s “Transfers” article rather than its “Major Decisions” article, which is exactly the kind of placement a senior partner skimming for “what consent do I need” will miss.
Third, build a consent-requirements matrix. The matrix should list every action the deal will require — equity transfers, distribution adjustments, ROFR waivers, drag-along invocations, manager replacements, amendment of the operating agreement (if applicable to the deal structure), and the merger or asset-sale approval itself. For each action, identify the consent threshold the operating agreement requires, the consent threshold the statute would require absent the operating agreement, and the specific procedural requirements (written consent, signed by individual members, delivered to a specific address, with a specific cure period). The matrix is the deliverable from the diligence process that prevents the closing surprise.
Fourth, identify the individual members who hold blocking positions under any of the operating agreement’s consent thresholds, and engage them early in the deal process rather than late. The holdout member in the example above had not been engaged because the deal team had assumed majority-in-interest consent was sufficient. By the time the supermajority provision was identified, the holdout member had already realized he had leverage and had retained his own counsel. Early engagement — even just a phone call from the selling principal to the passive investor explaining the deal and confirming alignment — would have prevented the surprise and likely prevented the holdup price concession.
The drafting move that prevents future versions of this problem
For founders or controlling members of Florida LLCs who anticipate a sale at some point in the future, the operating-agreement provision worth looking at is the supermajority-consent provision itself. Provisions that require eighty or eighty-five or ninety percent consent for a sale create blocking positions for minority members that the controlling members may not have intended. The provision often gets added during a financing round to accommodate a specific investor, and then stays in the operating agreement long after that investor has exited.
A pre-sale operating-agreement review — done eighteen to twenty-four months before any anticipated sale — should identify supermajority-consent provisions that no longer serve a current investor’s interests and should either remove them (if the original beneficiary has exited and the provision is vestigial) or restructure them (so the threshold runs against a defined investor class rather than against all members). The amendment process to clean up these provisions requires whatever member consent the operating agreement requires for amendments, which may itself be supermajority. The conversation about cleaning up the provisions is easier when no deal is on the table and the minority members do not perceive the cleanup as a deal-related disenfranchisement.
For Florida founders running multi-member LLCs, the operating agreement is the single most important governance document — more important than the statute, more important than the form merger agreement, more important than any of the typical M&A documents the founder will see for the first time at signing. The corporate-governance work on the operating agreement done years before a sale determines what the founder’s leverage looks like at the sale, and the founder who has not done that work has, by default, given some piece of the upside to whoever holds the blocking position the operating agreement created.
For buyers diligencing Florida LLC targets, the rule of thumb is to spend twice as much time on the operating agreement as on the statute. Chapter 605 is well-organized and the default rules are knowable; the operating agreement is bespoke, often badly drafted, and frequently contains provisions that bear no resemblance to the standard form. Florida-targeted M&A diligence on multi-member LLCs is largely the work of reading the actual operating agreement closely rather than assuming the statute fills in the answers.
If you are negotiating a deal involving a Florida LLC and you are trying to figure out whether the operating agreement creates consent requirements the statute does not, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
— John
