On September 16, 2026, the SEC made a significant proposal that, at first glance, seems to have little to do with the typical privately held Florida business.
I think there is a broader lesson in it.
On September 16, the Securities and Exchange Commission proposed eliminating Rule 14a-8, the longstanding federal rule that requires companies subject to the federal proxy rules to include certain qualifying shareholder proposals in their proxy materials.
If the proposal becomes final, the SEC would largely step out of that process. Questions about shareholder proposals would instead be governed by state law and, where state law permits, a company’s own governing documents. The SEC also proposed changes to Rule 14a-4 that would expand the circumstances in which companies could exercise discretionary voting authority over proposals that are presented at a shareholder meeting but excluded from company proxy materials.
Nothing has changed yet. This is a proposed rule, and the comment period remains open.
But the proposal is a useful reminder of something business owners tend not to think about until there is a disagreement:
Corporate governance rights have to come from somewhere.
For a closely held Florida company, that often means the documents everyone signed years ago and hasn’t looked at since.
The Public-Company Rule and the Private-Company Lesson
Most Florida family businesses will never have a Rule 14a-8 shareholder proposal.
That doesn’t mean the issue behind the SEC’s proposal is irrelevant to them.
A better question for the owner of a closely held corporation or LLC is:
What rights does an owner actually have when he or she wants the company to act—or wants to stop it from acting?
The answer may be scattered across several documents:
Articles of incorporation. Bylaws. Operating agreements. Shareholder agreements. Buy-sell agreements. Voting agreements. Sometimes trusts and estate-planning documents.
When a company is young, those documents tend to receive little attention. The owners are busy finding customers, hiring employees and generating revenue. Corporate governance feels theoretical.
Twenty years later, it may be anything but theoretical.
The business may now be worth several million dollars. Children may have entered the company. One owner may be approaching retirement. Another may want to sell. Ownership interests may have been transferred to trusts. Perhaps an outside buyer has appeared.
Suddenly, language that looked like boilerplate when the company was formed determines who can do what.
Governance Becomes Particularly Important When Ownership Changes
Consider a successful family business preparing for a generational transition.
The founder may want to transfer some of the company’s economic value to children without immediately surrendering control. One child may work in the business while another has chosen a completely different career. Some ownership may eventually be held in trust.
At that point, “Who owns the company?” is no longer a sufficient question.
Who votes?
Who appoints and removes directors or managers?
What decisions require a majority vote? A supermajority? Unanimous consent?
Can an owner transfer an interest without the consent of the others?
What happens if an owner dies or becomes incapacitated?
Does the company have the right to purchase that owner’s interest? Is it required to?
How is the purchase price determined?
Can voting rights and economic rights be separated?
What happens if the owners deadlock?
Those are not academic corporate-law questions. They determine who controls the company, who receives its economic benefits and what happens when the interests of the owners stop lining up perfectly.
If the owners haven’t answered those questions deliberately, eventually the governing documents—and applicable law—will answer them instead.
A Business Sale Has a Way of Exposing Old Governance Problems
The same issues tend to surface during an acquisition.
A buyer conducting due diligence will want to know who owns the company and whether the ownership records support that conclusion. The buyer will want to know who has authority to approve the transaction, whether transfer restrictions exist, whether anyone else holds options or other rights to acquire ownership, and whether the company has complied with its own governing documents.
That is not the ideal time to discover that the capitalization table and corporate records tell different stories.
Nor is it the ideal time to discover an old buy-sell agreement containing a valuation formula nobody remembered existed.
Or minutes that were never prepared.
Or ownership interests that were transferred informally but never properly documented.
Good M&A preparation therefore begins well before a letter of intent arrives.
Part of getting a business ready for sale is making sure the legal records describe the business that actually exists.
There Is an Estate-Planning Side to This Too
This is where 2026 becomes particularly interesting for owners of valuable closely held businesses.
The federal estate and gift tax basic exclusion amount is $15 million per individual in 2026. The 2025 federal tax legislation replaced the scheduled reduction in the exclusion with a new $15 million base beginning in 2026, subject to future inflation adjustments.
Florida, meanwhile, imposes no estate tax on current estates; Florida’s estate tax was eliminated for people dying after December 31, 2004.
For owners of substantial closely held businesses, that creates an environment in which succession and wealth-transfer planning deserves attention.
But transferring business interests is not simply a tax exercise.
Before transferring ownership to children or trusts, the owner should understand exactly what is being transferred.
Economic rights?
Voting rights?
Management authority?
Transfer restrictions?
Buy-sell obligations?
Rights of first refusal?
The ability to force—or prevent—a future sale?
Those questions belong in the same conversation as valuation, gifting, trusts and estate-tax planning.
A beautifully designed trust does not solve a poorly designed operating agreement. And an excellent operating agreement can still produce an unintended result if an owner’s estate plan sends the ownership interest somewhere nobody anticipated.
The documents need to work together.
The Governing Documents Should Describe the Business You Actually Have
Perhaps that is the most useful lesson to take from the SEC’s proposal.
The Commission is proposing to withdraw a federal framework that has governed shareholder proposals for decades and leave considerably more of the issue to state corporate law and company governing documents. The SEC describes the proposal expressly in those terms.
There will be substantial debate over whether that is good policy. And, again, Rule 14a-8 remains in place unless and until a final rule changes it.
A privately held Florida business owner does not need to wait for that debate to conclude, however, to ask a much more practical question:
If something significant happened to my business tomorrow, would my governing documents produce the result I actually want?
For a company formed recently with carefully prepared documents, perhaps the answer is yes.
For a family enterprise that has accumulated substantial value, added owners, brought children into the business, changed management, acquired other companies or begun thinking about a sale, it is a question worth revisiting.
Pull out the operating agreement.
Read the bylaws.
Find the shareholder or buy-sell agreement.
Look at the current ownership records.
Then put those documents next to the owners’ estate plans.
Do they still tell the same story?
If they do, great.
If they don’t, it is considerably easier to address the problem while everyone is alive, competent and still getting along.