Starting Your Own Business in Florida
Considering starting a business in Florida?
If you’re thinking about starting your own business in Florida, it is worth considering your options regarding the legal nature of your business.
For instance, if you create your business by yourself, you could have the option to file with the Florida Division of Corporations as a sole proprietorship and operate under a fictitious name. Another option for your business, is to create a Florida limited liability company (“LLC”).
There are several significant benefits to creating a Florida LLC. The primary reason people choose to create a “limited liability company” is right in the name! An LLC protects the individuals associated with the company from personal liability. Rather, the LLC as an entity is held liable for any legal issues that may arise out of its operation.
Another important reason relates to how you and your business are taxed. LLCs have what is called “pass through” taxation. This means that rather than the company being taxed itself, each individual member of the company is taxed directly based on their share of both profits and losses. This is especially beneficial if the LLC has many members.
Further, a Florida LLC provides great flexibility to its members. An LLC could have only one member or it could have hundreds. It also allows for people to choose between member-management or manager-management for the LLC. Member-management is more for smaller operations, whereas manager-management is when the members of the LLC would rather be hands-off with the operation of the business. This is all determined by the articles of organization that are filed at the time the LLC is created.
Advantages of an LLC in Florida
After considering the advantages of forming a Florida limited liability company, it is also worth noting some of the disadvantages that come along with LLCs. Compared to a corporation, for example, LLCs are more difficult to change once they’ve been established. When creating an LLC, it needs to include an operating agreement during formation. After that time, the operating agreement needs to be amended in order to make significant changes.
The Costs of an LLC
There are costs to consider as well. Unlike partnerships or a sole proprietorship, there are ongoing costs associated with the creation and maintenance of a Florida LLC. The filing fee for the creation of an LLC is also significantly higher than for sole proprietorships and partnerships.
If you’re considering starting your own business here in St. Petersburg, across the bridge in Tampa, or in any other part of the state of Florida, our experienced business attorneys at the Lopez Law Group would love the opportunity to speak with you and guide you through the process. We can help you determine which business entity best suits you and your future business’ needs.
References:
- www.sunbiz.org
2. Tax exemption on income of certain limited liability companies. Fla. Stat. 605.1103
3. Operating agreement; scope, function, and limitations. Fla. Stat. 605.105
Related: Business Entity Formation in Florida