Florida LLC

LLC Formation

A limited liability company (LLC) is a statutory form of business association that is designed to give members (investors) limited liability as in a corporation, and federal, but not state, income tax benefits as in a partnership. The management of an LLC may be vested in its members or elected managers, but none are personally liable for its debts and are generally governed by Operating Agreements. LLCs are not required to have Board of Directors or Officers as with a corporation, but may do so. The LLC’s profits are shared amongst its members as noted in its Articles of Organization, and its distributions are handled as in a corporation A member of an LLC may freely transfer his interest in its profits and losses, but may not transfer its management without the unanimous consent of the LLC’s other members. Also, there is to be no return of a member’s capital contribution to the LLC except with the unanimous consent of its members (or upon dissolution).

An LLC may be perpetual, and it has all the powers vested in a corporation To create an LLC, you must adhere to various formalities, including the payment of a $100.00 filing fee and a $25.00 registered agent fee to the state and the drafting/ filing of the Articles, which MUST include the following:

• The name of the LLC (must contain “LLC” or “Ltd.”, etc.),
• The address of the LLC’s principal office, if known, and the mailing address of the LLC,
• The address of the LLC’s initial registered office,
• The name and address of the LLC’s initial registered agent, who must also sign an affidavit to the effect that he is familiar with and accepts the obligations of the position,
• The names and addresses of the LLC’s managing members, and
• If an effective date is listed, the date must be specific and cannot be more than five days prior to, or 90 days after, the date of filing of the Articles.

You must file an annual report with the FL dept. of state to qualify to do business as an LLC in FL, the cost of which is $50.00 (compared to up to $550.00 as with a corporation), or else you may not bring or defend against any suit in a FL court. There are, however, few other such filing requirements. In determining which entity to operate as, an LLC or Corporation, here are some of the benefits of choosing to operate your business as an LLC:

• Allows for flexibility related to self-employment tax; the self-employment tax for 2009 is 15.3 % for social security, 2.9 % for Medicare.
• There are few restrictions as to who can own the LLC.
• It is not necessary that formal meetings be held annually, and business documents need not be scrupulously maintained or filed with the state.
• Allows for flexibility regarding distribution of income and losses; in other words, a shareholder/ owner may be compensated more or less than the worth of his share in the business, so that a manager, for example, can derive more profit for his contribution in running the business.

You should remember that failure to comply with any of one the LLC formation requirements noted above could nullify the protections of LLC status. It is thus advisable that you hire a licensed Florida Business Law attorney with experience in the practice of business law to help you through the process.

Contact an Experienced Business Law Attorney

If you would like more information about this topic, contact Lawrence Tolchinsky to find out how he can help you. You can contact him by phone at 954-458-8655 or by e-mail through this web site to schedule an appointment and learn more about title insurance. He offers a free initial consultation.

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