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Form a Florida Limited Liability Company
CLICK HERE TO FORM AN LLC
The LLC is a relatively new type of hybrid business structure that is now permissible in most states. It is designed
to provide the limited liability protection of a corporation and operational flexibility and pass-through taxation
advantage of a partnership. Formation is slightly more complex, expensive and formal than that of a general partnership,
yet is less regulated and requires less annual government filings than an S Corporation.
The owners are members, and the duration of the LLC is usually determined when the initial organization papers are
filed. LLCs typically have a limited life span, and upon filing initial paperwork should contain a dissolution date.
The time limit can be continued, if desired, by a vote of the members at the time of expiration. LLCs should not
have more than two of the four characteristics that define corporations: Limited liability to the extent of assets,
continuity of life, centralization of management, and transferability of ownership interests.
An LLC may be best for businesses with a small number of owners intending to operate as a partnership, or for small
business owners or investors looking to hold real estate. Unlike S corporations, LLCs may have more than 100 members,
and they need not be natural persons who are residents or a citizens of the United States, increasing investment
opportunities.
The main reason to form a legal business entity is to safeguard personal assets. By organizing, you're free to
conduct your business without worrying that you might lose your home, car, or any of your personal savings because
of a business liability. This is one of the best moves you can make to protect your personal property when you own
your own business. Incorporate Florida's ® personalized service makes this process easy and secure, ensuring
that your assets are protected.
Incorporate Florida, Inc. is qualified to properly form your limited liability company and prepare your company
documents, to protect you from personal liability for company debts. If properly formed and maintained, the personal
assets of a member cannot be reached by company creditors, due to the veil of protection afforded by the limited
liability of the company.
However, should you fail to comply with the required formalities and regulations, such as paying annual fees and
filing proper documents, or authorize improper transfer of assets, your corporate veil may be pierced. This happens
when a lawsuit is filed against the company, and a court determines that the company has not complied with proper
procedures. If your corporate veil is pierced, the members become open to liability for the claims, debts, and
obligations of the company.
ADVANTAGES
Reduce your personal liability.
Members have limited liability for the companies debts or judgments against the company. Generally, members can only
be held accountable for amount of capital invested in the company. (Note however, that managers and managing members
can be held personally liable for their actions, such as the failure to withhold and pay employment taxes, or for any
personal guarantees they might sign.)
If you operate as a sole proprietorship or general partnership, you're personally responsible for any business claims,
debts or lawsuits against your business. As the owner of a properly formed and maintained LLC, your personal assets
are protected from any liability incurred by your business because LLC organization enables you to maintain separate
business and personal identities.
In addition, the limited liability company has fewer formalities than a corporation, which means less paperwork and
less chance that the members will inadvertently violate the law and thereby lose their liability protection.
Incorporate Florida properly forms and assists you with maintaining your company to protect your assets.
Tax benefits.
LLCs are treated similar to partnerships by the IRS, which means that members may treat the earnings and profits as
distributions and have them pass through directly to their personal tax return. However, an LLC may elect to be
treated like a C corporation for tax purposes. Owners of an LLC are usually not required to pay unemployment
insurance taxes on their own salaries.
Choice of profit distribution.
Members of an LLC may decide on the method for distributing profits to its owners. While a corporation is required
to distribute based on ownership percentages, and LLC may decide to split profits in any manner chosen by the members
and detailed in the operating agreement. Incorporate Florida® properly organizes your company in your chosen manner,
and prepares a personalized operating agreement best suited to your needs.
Attract non-U.S. investors.
Your status as an official company implies a real legitimacy to your business that will impress potential customers,
vendors and lenders, making it easier to generate new business and form partnerships in the global business community.
There are no ownership restrictions on membership in an LLC, so there is no limit on the number of members a company
may have, and members do not need to be U. S. Citizens to own or invest. Incorporate Florida® issues beautifully
designed, personalized membership certificates for the life of your company.
Simple Structure and Easy Operation.
LLC's are generally free to establish any organizational structure agreed on by the members, and set forth in the
operating agreement. One of the premier benefits of forming an LLC is that there are no mandatory meetings, although
we usually provide for at least an annual members meeting in the operating agreement we prepare for our clients.
While corporations must hold regular meetings, keep written records and file annual reports, LLCs don't have to hold
regular meetings, or keep company minutes (although we recommend that you do so), which can reduce operating expenses
and the possibility of complications. Incorporate Florida prepares a personalized operating agreement best suited to
your needs.
DISADVANTAGES
While an LLC offers many benefits, is important that you are aware of some disadvantages of this structure.
Limited life.
An LLC typically has a limited life span, the duration of which is usually determined when the initial organization
papers are filed. The time limit can be continued, if desired, by a vote of the members at the time of expiration.
Traditionally, an LLC is dissolved when a member dies or undergoes bankruptcy. The recent changes to the IRS code
have promoted changes in state laws permitting some LLCs to be created with an unlimited life.
For more detailed information regarding limited liability company status, contact your accountant or local IRS office, or
contact us.
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