The Florida House of Representatives and Senate have passed a bill adopting a sweeping overhaul of the laws governing Florida not for profit corporations, under Chapter 617, Florida Statutes, that if signed by Governor Desantis would be effective on July 1, 2026. This law, formally changing the name of Chapter 617 to the “Florida Nonprofit Corporation Act” (hereinafter referred to as the “Act”), and impacts nearly every aspect of nonprofit corporate governance.
This Act will have far reaching impacts on all existing Florida nonprofit corporations.
Some of the new provisions include:
Modernized Governance Framework
The Act updates rules for boards, officers, and members, clarifying fiduciary duties, director standards of care, and permissible reliance on officers and professional advisors;
Clear Membership Rules
The statute provides detailed rules updating governing admission, resignation, dues, assessments, discipline, and termination of members, with procedural protections built in;
Expanded Conflict‑of‑Interest Safe Harbors
Now, transactions involving interested directors are permitted if properly disclosed, approved by disinterested decision‑makers, and fair to the corporation;
New Derivative Action and Litigation Provisions
The Act introduces a modern framework governing derivative claims, including standing, demand requirements, dismissal standards, and fee shifting;
Enhanced Merger, Conversion, and Reorganization Options
Florida nonprofits now have clearer statutory authority for mergers, conversions, and domestications, while maintaining strict protections against diversion of charitable assets; and
Clarified Compensation and Distributions
The Act reaffirms restrictions on profit distributions but clearly permits reasonable compensation, benefits, and certain refunds and credits that are not treated as distributions.
While existing nonprofits are not automatically out of compliance, the Act changes the default statutory rules in many areas. If signed into law, nonprofits should plan to review their:
- Articles of Incorporation;
- Bylaws; and
- Policies and Procedures (including any Conflict-of-Interest Procedures).
Florida nonprofit corporations considering a reorganization should pay particular attention to the new statutory frameworks to ensure compliance with the Act.
Additional thought leadership and updates will be posted on this significant new legislation and its impacts on Florida nonprofit corporations.
