LLC in Florida
The Sunshine State carries potential for small business owners seeking asset protection. A Florida LLC combines the liability protection of a corporation with the tax treatment and ease of administration of a partnership.
Pass-through taxation. LLCs typically enjoy pass-through taxation where the members (owners) report their share of the LLC’s profit or loss on their individual tax returns. Any tax due is then paid at the individual level. Multi-member LLCs file an informational (partnership) tax return for the LLC, while single-member LLCs report all income or loss on Schedule C.
Pass-through taxation sidesteps the double taxation incurred by C corporations when income is taxed at the corporate level and again at the individual level if corporate profits are distributed as dividends to owners (shareholders).
Flexibility. LLCs generally have no restrictions on the number of members allowed, and members have flexibility in structuring management of the company. Florida LLCs can also select varying types of distribution of profits. Unlike a common partnership where the split is 50-50, an LLC has room for much more flexibility.
Fewer formalities. The LLC business entity requires no corporate minutes or resolutions, making it easier to manage. Holding annual meetings of members and documenting major business decisions is still recommended, however.
Subsidiaries. Unlike Florida S corporations, Florida LLCs are allowed to have subsidiaries without restriction.
Company in Delaware
There are many advantages to opening a new company in Delaware. This is often a popular state for non-residents to choose to incorporate. Below we will discuss some of the main advantages of opening a new company in Delaware.
Anonymity – Company records are not open to the public. Owner and/or members of a company are not easily found on the internet. In order to find information about the owners of a Delaware company, a fee must be paid. For this reason, Delaware offers more anonimity.
Limited liability – Owners of an LLC have the limited liability protection of a corporation. Flexible profit distribution – Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
No minutes – Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
Flow throught taxation – All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
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