Form LLC in Florida – Advantages and Disadvantages
In an LLC the owners of the company do not have to pay the creditors from their personal assets in case of bankruptcy. They are only liable for the amount of money that they have invested in the company. This is similar to a corporation but the terms and conditions, and the requirement of maintain the company are simpler as compared to a corporation.
Forming a limited liability company is a very simple process and there are no complicated procedures or documents involved in starting an LLC in contrast to forming a corporation. The process is very simple and self explanatory and can be easily understood by anyone who is interested to form LLC in Florida. There are certain advantages and disadvantages in forming an LLC that will be discussed in this blog.
Form LLC in Florida – Advantages
- One of the basic advantages of forming an LLC in Florida is the protection of the assets of the owners of the firm in case of bankruptcy. This is why it is called limited liability because owners are only liable to the extent of the amount that they have invested in the firm. In an LLC creditors cannot claim the personal assets of the owner which is an advantage over partnership or sole proprietorship.
- An LLC saves you from double taxation. An LLC does not have to pay any taxes to the government itself, rather the profit or loss suffered by the company is added to the income tax return of the members. This way the tax is passed to the members and they do not have to pay any tax at the business level. This prevents double taxation that takes place in corporations where first the company pays taxes and the shareholders also pay taxes from their dividends.
- If you form LLC in Florida it makes maintaining the company easier. Limited liability companies have less rigid organizational and management structure and they are not under any restrictions about the amount of members that they can have. In an LLC the members have the discretion to decide the structure of the company. An LLC can have can have many owners and their responsibilities are written in the company’s agreement.
- Last but not the least, an LLC increases the credibility of the company which open doors for clients and investors to help the company grow.
- One of the few disadvantages of forming an LLC is the startup fee for the company. In the starting the members have to pay a filing fee which can range between $100 and $800 depending on the state where your company is located. On the contrary one does not have to pay any fee when setting up a partnership or a sole proprietorship.
- Another disadvantage of an LLC is that the company gets dissolved if one of its members leaves the company, becomes disabled, or dies. This is in the general terms of the company but now there are practices where the members specify the course of action if such an event takes place.
Form LLC in Florida – Disadvantages
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