Registering your business with the State of Florida is a crucial part of your company’s creation process. Often times, many individuals who are new to the business world opt for a limited liability company (“LLC”) when they intend to register their new business. Mainly because they desire something simple and less complicated, especially during the beginning stages. An LLC offers just that, not only is it easy to form, but it is also easy to manage.
What are the Advantages of a Florida LLC?
In comparison to formation of a corporation, a Florida LLC is simple to start. Whether you intend to own the business as a sole member or wish to have multiple owners, the set-up process is just as easy either way. There is no paperwork required and the registration process will take place solely on Sunbiz, which is Florida’s database for business corporations. Once registered, a Florida LLC is automatically elected as a pass-through entity, which means that the income or profits of the company go straight to the members, as this avoids double taxation. The owner(s) will simply be taxed for the company profits at their individual level when they file their personal tax returns.
Another great advantage of an LLC is the flexible business structure. LLC’s are not required, unlike corporations, to create meeting minutes or maintain a board of directors. The management component of an LLC doesn’t have many formal requirements, in fact, it’s permissible to have just one owner, this is referred to as a single-member LLC. Lastly, an LLC is a great safeguard against personal liability and offers a protective shield for its owners in cases where a creditor seeks a judgment against the company.
What are the Disadvantages of a Florida LLC?
The main downside of an LLC is the difficulty of transferring ownership. If you’re considering an LLC, it’s important to focus on the type of business structure you want to go for. If you wish to have outside investors or the ability to issue shares of your company, an LLC would not be the best structure for you. In that instances, formation of a corporation will be more beneficial. Although the formal requirements are a lot more demanding in a corporation, the ability to issue shares of your company and transfer ownership will be a lot easier to navigate through.