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Florida Limited Liability Company (LLC)

LLC’s have long been a traditional form of business structure in Europe and Latin America. With the recent inclusion of Hawaii, all 50 states and Washington, D.C. have now adopted some form of Limited Liability Company legislation for both domestic and foreign (out of state) limited liability companies. Florida adopted such legislation on 10/1/99.

Many business professionals believe Limited Liability Companies present a superior alternative to corporations and partnerships because LLC’s combine many of the advantages of both. With a Florida Limited Liability Company, the owners can have the corporate liability protection for their personal assets from business debt as well as the tax advantages of partnerships or Florida S Corporations. It is similar to an S Corporation without the IRS’ restrictions.

ADVANTAGES of Florida LLC’s

  • Protection of personal assets from business debt
  • Profits/losses pass through to personal income tax returns of the owners
  • Great flexibility in management and organization of the business
  • Limited Liability Companies do not have the ownership restrictions of S Corporations making them ideal business structures for foreign investors

DISADVANTAGES of Florida LLC’s

  1. LLC’s often have a limited life (not to exceed 30 years in many states) Some states require at least 2 members to form a Limited┬áLiability Company, and LLC’s are not corporations and therefore do not have stock — and the benefits of stock ownership and sales.
  2. These lists are not inclusive. For more detailed information, please be sure to speak with a qualified legal and/or financial advisor.

Florida Limited Liability Company Overview

IMPORTANT NOTE REGARDING THE FEDERAL TAXATION OF LLC’S

  1. Before January 1, 1997, the Internal Revenue Service determined whether a limited liability company would be taxed “like a partnership” or “like a corporation” by analyzing its legal structure or by requiring the members to elect the tax status on a special form. Effective January 1, 1997, the IRS has simplified this process.
  2. Pursuant to these new IRS regulations, if a limited liability company has satisfied IRS requirements, it can be treated as a partnership for federal tax purposes. As such, LLCs are required to file the same federal tax forms as partnerships and take advantage of the same benefits. However, this is still a highly technical area, and if you require further information, it is recommended that you communicate with the Internal Revenue Service or consult a competent professional such as a qualified tax accountant or attorney.

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