One Signature. Two Owners. Midnight.

DECEMBER 31, 5:47 P.M. The seller is waiting. The purchase agreement is ready. Last week, the company’s accountant warned that a planned tax result depends on closing before January 1. But one of the two owners of this Florida LLC is out of the country and unreachable. The other owns exactly half.

“Just sign it,” someone says. “You own 50 percent. What could go wrong?”

Quite a lot, potentially. The clock may be running out, but Florida law does not suspend its rules for a good deal. The first question is not whether the signature looks impressive. It is whether the company authorized the purchase – and whether the person signing can bind it.

No operating agreement? The law has one more question.

Many small LLCs never sign a formal operating agreement. Others have one that says nothing about approving a major purchase. Neither situation means the available owner gets a free pass. Under section 605.0105(2), Florida’s Revised Limited Liability Company Act supplies rules for matters not addressed by an operating agreement. And an “operating agreement” can be oral or implied, not just a document in a binder. See section 605.0102(45).

Unless the articles or operating agreement establish manager management, a Florida LLC is member-managed. Section 605.0407(1). In that structure, section 605.04073(1)(b)-(c) generally requires the affirmative vote or consent of a majority-in-interest for company action, whether inside or outside the ordinary course of business. “Majority-in-interest” means more than 50 percent of the members’ current interests in company profits. Section 605.0102(37).

So assume our two owners each hold a 50 percent profits interest. One of them cannot create a majority by acting alone. Silence from an airplane seat is not a yes vote.

Here is the twist: Approval and signing are not the same thing.

Florida has a separate agency rule. In a member-managed LLC, a member’s act apparently carrying on the company’s ordinary business may bind the LLC to a third party, even without internal approval, unless the third party knew or had notice of the member’s lack of authority. Section 605.04074(1)(a). But an act outside the apparent ordinary course binds the LLC only when authorized by the appropriate vote. Section 605.04074(1)(b).

Is acquiring a competitor ordinary business? Do not answer that question with a slogan. A company that routinely buys businesses may be different from a family-owned shop attempting its first acquisition. The transaction’s nature, the LLC’s history, its governing documents, and the seller’s knowledge all matter. An acquisition structured as a merger or involving real-estate conveyances may trigger additional rules.

For a manager-managed LLC, the analysis changes: membership alone does not create agency authority, and the statute separately addresses managers and extraordinary transactions. Sections 605.04073(2)(d) and 605.04074(2).

What the courts actually said

In Akerman, LLP v. Cohen, 352 So. 3d 331, 338 (Fla. 4th DCA 2022), the court rejected the notion that a member’s ownership interest alone gave him unilateral authority to waive an LLC’s attorney-client privilege. The member held 40 percent in several entities; the record did not show an agreement or articles giving him authority to act alone. The case concerned privilege, not an acquisition, but its warning about mistaking ownership for decision-making power is unmistakable.

In Kertesz v. Spa Floral, LLC, 994 So. 2d 473, 475 (Fla. 3d DCA 2008), owners holding 55 percent properly removed a managing member who held the minority interest. The court found no deadlock: there was a genuine majority. That decision applied Florida’s former LLC statute, not today’s Chapter 605; it illustrates majority rule, not a license for one of two equal owners to act alone.

And consider a memorable agency lesson from outside LLC law. In Florida Power & Light Co. v. McRoberts, 257 So. 3d 1023 (Fla. 4th DCA 2018), a jury awarded $1.5 million over an alleged brokerage agreement discussed at a football tailgate. The appellate court reversed because the employee lacked actual or apparent authority to bind FPL. A title and a confident handshake were not enough. This was a corporate-agency case, so it is an analogy, not a construction of Chapter 605.

The rescue plan before the ball drops

The absent owner need not necessarily fly home – or personally sign the purchase agreement. Section 605.04073(4) permits members to approve action without a meeting through the requisite consent in a record and allows a properly signed proxy appointment. Section 605.04073(6) permits telephone or similar meetings when all participants can hear each other. Section 605.04071 recognizes delegation of management powers. With proper approval, the LLC can authorize one person to execute its documents.

Counsel should check the operating agreement (including oral or implied terms), articles, any filed statement of authority, prior delegations, and the purchase’s exact structure. Section 605.0301 identifies several potential sources of authority to bind an LLC. Any lender, seller, closing agent, or real-property instrument may impose further requirements.

If the missing owner truly cannot be reached, the prudent move may be to negotiate an extension or an agreement expressly conditioned on later authorization – not to pretend the company voted. An accountant’s year-end advice deserves attention, but it does not supply the missing approval. Florida’s duties of loyalty, care, and good faith under section 605.04091 do not create an emergency exemption. The accountant and tax counsel also must verify which event actually qualifies as a tax-year closing; signing on December 31 does not necessarily settle that question.

The real question is not, “Can I put my name on the paper?” It is, “Who gave me the power to commit the company?”

A great deal can die at midnight. A bad signature can live much longer.