A Breakdown Of LLC’s In Florida: What You Need To Know

setting up an llc in florida business limited liability company setup fl corporation

What Is An LLC? 

An LLC is a Limited Liability Company which is viewed as a separate, legal entity. The primary advantage and reason why entrepreneurs choose to form this business structure is because it provides you with personal asset protection. Therefore, if the business should find itself with a legal claim against them, the owner’s private assets (for example, a car or house) will be safe. With this official entity, the law distinguishes between business and private assets. Owners of an LLC are referred to as ‘members. The state of Florida permits the formation of single-member LLC’s which is not allowed in every state. In a single-member LLC there is only one member (owner) in the company. This is opposed to a multi-member LLC where there are multiple owners of the business. 

An Example Of An LLC In Florida 

You have formed an LLC of “Silky Smoothe LLC” where you sell shampoo products. A disgruntled customer sues your company after they had an allergic reaction to it. Should the court rule in the customer’s favour, and should your business not be able to pay the amount owed, your personal assets (like your house, car, investments) cannot be claimed by the plaintiff to settle the debt. 

Need more examples? Find out more about LLC’s in Florida. 

Facts About LLC’s In Florida 

Control and simplicity Registration is uncomplicated and simple. You are able to complete your registration conveniently online. The registration fee is not greatly expensive ($125) which will be favourable for start-up businesses. There is no limit to the number of members/ managers an LLC can have which grants more control over the company’s operations. 

Article For Organization Of An LLC Form Comes With Benefits 

Member and manager privacy can be protected. By providing only the essential information on the “Article for Organization of an LLC” form, you can protect the LLC managers. By leaving the section that reads “Person(s) authorised to manage your LLC” blank on the form, you can protect member privacy as the state will automatically view your LLC as being member-managed. 

Protection Of Personal Assets 

LLC’s offer a shield of legal protection over your private assets. If your company is sued or falls into debt these costs will not be settled with the member’s personal assets. 

Tip: You can also protect your business’s assets by applying for a business bank account and credit card. 

“Pass Through” Taxation 

This is a major advantage that comes with forming an LLC. In this business structure, no taxes are paid by the business itself. Instead, the members are responsible for paying income tax on profits earned from the business. Therefore, the duty of tax has been “passed through.” Operating agreements avoid disputes This is known not to be a legal requirement to form an LLC in Florida, but it is still a good idea for your business. This operating agreement will dictate the terms of ownership and operation of the LLC to help limit risk of conflict in the future. 

Members Keep More Of Their LLC Earnings 

By setting up an LLC in Florida, this grants the members certain flexibility with determining profit sharing. Members can draw up profit sharing regulations in the structure of their choice. Consequently, as opposed to a corporation, LLC members can choose to distribute profits on an amount that differs from the percentage of the business owned by the member. 

Forming a multi-member LLC (multiple owners) is advisable. This is because a court ruled that single-member LLC’s may have less or limited protection of private assets as it dictated that ownership interest is at risk of being claimed by the creditor if they are still owed.

Bootstrap Business Blog Newest Posts From Mike Schiemer, Partners, & Blog Outreach Services