Florida has the 4th largest population in the USA and boasts a thriving business community, remaining one of the most popular states for incorporation and LLC formation. A number of the country’s largest companies including Publix Super Markets and Tech Data have their headquarters in Florida. The Sunshine State also services numerous many smaller businesses, especially those in industries such as mining, agriculture, and tourism.
Florida has a lot of great potential for small business owners that are looking for asset protection. A Florida LLC has the ability to combine the liability protection a corporation enjoys with the tax treatment and simple administration of a partnership. The abbreviation ‘LLC’ lends a tremendous amount of credibility to a business name but like with any other business structure, LLC’s have both advantages and disadvantages.
LLC’s are generally able to enjoy pass-through taxation benefits where the owners report their own share of the LLC’s loss or profit on their individual tax returns.If there is any tax due it is then paid at the individual’s level. A multi-member LLC will file a partnership tax return for the LLC while a single-member LLC report all profit and loss on Schedule C. This pass-through taxation avoids the double taxation often incurred nu closed corporations when income is taxed both at corporate and individual levels.
An LLC typically does not have restrictions on how many members are allowed with the members having flexibility in structuring the management of the company. Florida LLC’s are able to select different types of profit distribution unlike in a common partnership where the split is generally 50/50. An LLC Florida including single-member companies may be owned by foreigners as well as other corporate entities. Additionally, although not typically used by typical small-business owners, Florida LLC’s are allowed to have an unlimited amount of subsidiaries.
The LLC business model does not require corporate minutes or resolutions making it a lot easier to be managed. While there are significantly less formalities needed it is still recommended that the members hold annual meetings and document any other major business decisions as they are made.
It is important to determine whether a Florida LLC is the right business structure for you before resorting to action and spending money on it. Do sufficient research and consult with an attorney, accountant or another relevant service provider before making any pertinent business decisions.
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