One of the recommended companies in Florida is forming Limited Liability Company when you want to protect your personal assets. Included in the benefits is the easy access to partnership, protections of the corporation’s liability, tax treatment and the chance to use LLC abbreviation on the company’s name. Who would not want to have these all benefits? You can research more here at www.sunbiz.org. But of course, good comes with negative sides too. There are also cons creating LLC. Like any business structures, you can find few negative effects here in this type and you can read them below.
- Less formality. Though yearly meeting and documentation of big business transactions are recommended, the entity does have limit formalities when it comes to management. It does not use minutes and resolutions.
- Flexible in members. When it comes to numbers of shareholders, limited liability company florida does not have a limitation over the members. There is flexibility over the structure of management among members. It offers different levels of distributions for the profit. It gives you more room for investments and shares unlike other Florida corporations who have equal shares among members.
- Traverse taxation. It does not have to acquire the double taxation of S Corp. The members will report to the LLC as individual tax holders of income.
- Pricey fee. Unlike other most partnerships or the sole proprietorships, this company is more expensive when it comes to initial and ongoing fees.
- Ownership transfer limit. Unlike the corporation, the ownership transfer is a little bit hard. You can to go through the LLC agreement whether the ownership is transferable or needs approval from members.
- Low case law. This is a newer business that is why it is expected to contain not much case law.
These are the pros and cons of Florida LLC. There is even an outgoing debate between llc vc s corporation.