What is LLC:
A limited liability company (LLC) is a type of business structure. It’s a type of business structure that enables the owners not to be held responsible for the profit and losses. Generally, a Limited liability company (LLC) is defined as a distinct type of business entity structure that enables the owners not to be held responsible for the proceedings of the business. These are hybrid entities that function as a mix of sole ownership and multi-member proprietary corporation. This hybrid structure or LLC works like a distinct legal firm that allows it to get tax numbers, open business accounts, etc. All the members are known as members. All these members enjoy all the features and advantages LLC has to offer.
Advantages of an LLC:
Three prime benefits of the structure are as follows:
The members of LLC are not accountable for the actions and decisions made by the business. The members can themselves decide on how to divide their profit and losses between themselves. It is not necessary to have an equal share.
The documentation and official filing works are comparatively less than other structures.
Disadvantages of an LLC:
Though very minor, these are the disadvantages:
In the case, of the death of a member(s), the entity has to be formed again as it gets dissolved automatically. The same rule applies when any member exits the formation.
The members are supposed to pay self-employment tax because members are also the employees of the LLC. The tax contributes to almost 15.3% is paid by each member.
How to form a Florida LLC:
How to open llc in florida is not that difficult. The LLC regulations are different for all the states. LLC’s are not taxable by the federal government, while some states levy taxes on the LLC. As should be clear by now, LLC has to be a different entity from an individual. So, the following are the steps to get you started to form an LLC in Florida:
- Choose a name for your LLC:
You will have to decide on your business entity name. The name should be different than the name of the LLC owners. That name should not already be taken or registered by anyone else in your state. The name of the business will require to end with an “LLC”
- Appoint a registered agent:
Appoint a professional agent who can handle legal documentation related to LLC formation.
- File an Article of Organization:
After deciding on the name, file an Article of Organization with the state secretary of Florida. A fee is charged to file the article.
- Prepare operation documents:
After that, file for your legal permits and business licenses. Prepare your operating agreement document.
- Obtain an EIN:
Finally, check the status of income tax obligations. Obtain your Employee Identification number or commonly refer as EIN, from the state office.
- File for Annual Reports:
LLC has to file the annual report to have an active status of operations.
The owners of this type of entity enjoy liability protection that is generally provided by another corporation structure. Consider forming an LLC in Florida to have the features of a corporate-structure but without the liability to pay double taxation. LLC protects the owner’s individual income tax to be affected by the business’s profit and losses.
Name: Freedomtax Accounting, Payroll & Tax Services
Address: 1016 E Osceola Pkwy, Kissimmee, FL 34744
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