LLC Authority and Agency: How They Interact with Your Operating Agreement

For those forming or managing a Florida LLC, one of the most overlooked—but critical—elements of risk management is authority: who has it, how it’s defined, and how it can bind the company to third parties. Under Florida law, these issues are not abstract—they can determine the outcome of complex, high-stakes disputes over control of company assets.

In business litigation, especially among owners, investors, and managers, courts do not look at intentions—they look at documents. That’s why the operating agreement isn’t just an internal governance tool; it’s a contract with teeth. One that can—and often will—be used as a sword or a shield in litigation.

Under the FRLLCA, an LLC is bound by the authority granted in the LLC’s operating agreement. A manager or member of the LLC may bind the company if they have been given authority expressly under that agreement or in the articles of organization.

In practice, this means:

• If your operating agreement gives each manager or trustee “sole authority,” then each can act unilaterally.
• If no safeguards—like joint consent or written approvals—are built in, one person can bind the entire company, even in major transactions.

Courts won’t read in limitations that aren’t there. Drafting must be deliberate, detailed, and anticipatory.

Florida law also protects third parties who rely on someone’s apparent authority—meaning the authority that appears to exist based on how the LLC presents itself to outsiders. If your company fails to limit that authority publicly (for example, by recording a statement of authority in the public real estate records), a third party can rely on the manager’s signature, even if they technically exceeded their power.

Third parties, such as lenders or buyers, are not required to investigate internal LLC disputes or verify internal revocations of authority unless they have actual notice. If the company does not publicly disclose limitations, the transaction will often be upheld—even if the signatory was acting beyond their real authority.

If your LLC has not recently reviewed its operating agreement or filed formal authority statements, now is the time. Proactive governance is far less expensive than reactive litigation.

If the information in this blog applies to you, please contact one of our experienced business law attorneys in Miami at 305-570-2208. You can also contact attorney Eduardo A. Maura at eduardo@ayalalawpa.com.