Florida Statute 605.0502
“Transfer of transferable interest”
What it means
Florida splits an LLC interest in two. The transferable interest — the right to receive distributions — can be sold, gifted, or inherited. Membership — the vote, management rights, access to records — does not travel with it.
A transferee gets the distributions the member would have received, and on dissolution an accounting only from the dissolution date. The transferor keeps every other right and every duty of a member. The company may disregard the transfer until it knows or has notice of it, and a transfer that violates a restriction in the operating agreement is ineffective against anyone with knowledge or notice of the restriction.
- A transfer conveys the right to distributions — not membership, not management participation, not access to company records.
- A transfer does not by itself dissociate the member or dissolve the company.
- The transferor retains all other member rights and all member duties until membership itself changes hands.
- The company need not honor a transfer until it knows or has notice of it.
- A transfer violating an operating-agreement restriction is ineffective against a person with knowledge or notice of the restriction.
How it plays out
This is the statute behind most inherited-LLC surprises we see. An heir receives a 40% interest and assumes 40% of the say; what actually arrived was 40% of the distributions — if the remaining members declare any. Whether the heir ever becomes a member depends on the operating agreement, often on the other members' consent. We check the agreement's transfer and death provisions before valuing the interest for an estate inventory, because economics without control is worth less and behaves differently.
Where this shows up
Pages on this site where § 605.0502 does real work:
Questions people ask
