LLC in Florida
Is an LLC right for you?
Choosing the best business entity for your business is an important decision. When seeking an attorney to help with your business, you should make sure the attorney considers all of your goals and all potential risks. A business entity that is becoming increasingly popular is the limited liability company (LLC). Below are a few of the benefits of choosing an LLC for your business type.
Advantages of an LLC
Less Risk of Personal Liability – One of the major reasons why people choose an LLC is because there is less risk of personal liability. If you own a sole proprietorship or a partnership, you are at risk of being responsible for not only debts of the business, but also legal actions. Having an LLC can shield you from both. A LLC is treated as separate from the owners. What does this mean for a business owner? Well, it means that an owner will not be personally liable for the debts or other liabilities of a business. For example, if there is a slip and fall accident on the premises of your business, and your business is sued, only the business would be liable for any damages. The owner’s personal wealth would not be reachable (with a few exceptions).
Pass Through Taxation – One of the major benefits of an LLC is its tax flexibility. Corporations are generally subject to double taxation. LLCs are subject to what is known as pass through taxation. Pass-through taxation allows an owner to elect to have the company’s earnings and losses pass through to the owners of the LLC. The owners are then taxed at their individual tax rate. This can result in lower taxes than if taxed like a corporation.
Less Formalities – An LLC does not require corporate minutes as a corporation was. (It is still best to follow certain practices such as documenting major decisions, and holding member meetings.)
Disadvantages of an LLC
There are a few disadvantages of an LLC. If you plan to eventually have a publicly traded company, an LLC can complicate the process of going public at a later date. Additionally, it can be harder to transfer ownership depending on what the LLC’s operating agreement says.
Above are just some of of the benefits and negatives of an LLC. If you are considering forming an LLC, contact an attorney at Smith & Eulo Law firm and let us help you determine the best entity for your business.