Gary Teblum Co-Authors Article That Addresses Key Changes To the Florida Business Corporation Act (Part 1)
The revised act (designated F.S. Ch. 2019-90) will become effective on January 1, 2020.
Florida’s corporate statute (Part I of the FBCA) is largely modeled on the Revised Model Business Corporation Act. The Model Act is promulgated by the Corporate Laws Committee of the Business Law Section of the American Bar Association. Although the Model Act has changed extensively over the past 35 years, the FBCA has been overhauled only once (in 1989) and otherwise has endured patchwork amendments.
The revised act is the work of the Chapter 607 Drafting Subcommittee of the Corporations, Securities and Financial Services Committee of The Florida Bar’s Business Law Section. The subcommittee’s mission statement was to comprehensively study Florida’s business corporation statute and to propose a more cohesive revision and set of amendments.
The revised act includes 1) changes based on the 2016 version of the Model Act; 2) language changes that make the statutory provisions more understandable and usable by those who have to work with the statute (including judges), including fixing existing statutory language; 3) changes that borrow parallel language and approaches from the Florida Revised Limited Liability Company Act (FRLLCA) for purposes of harmonizing the two statutes on issues where harmonization was considered appropriate; and 4) necessary corrections to cross references. It also retains certain non-Model Act provisions already contained in existing Ch. 607 and continues, in certain cases, to borrow language from the Delaware General Corporation Law (DGCL).
During the course of drafting the revised act, extensive input was secured from representatives of the Florida Department of State, Division of Corporations.
This revised act uses the term “chapter” to refer to Ch. 607, Parts I, II and III, and eliminates the use of the term “act.”
As part of its work, the subcommittee has written an extensive commentary. A full version of Ch. 607, annotated with the changes made in the revised act and the commentary, is available for download at flabizlaw.org.
Click here to read highlights of the most significant changes to the FBCA.