How to Tell If an LLC Will Benefit Your Florida Business
LLC Benefits for Florida Business Owners and Entrepreneurs
While it’s common knowledge that there are a lot of benefits that come with forming an LLC in Florida, it’s not a one-size-fits-all business entity. In order to know if an LLC is really your best option, you first need to understand what benefits an LLC offers, as well the limitations they come with.
What an LLC Does
In Florida, an LLC is a business entity that helps protect the business owner against litigation. From a legal standpoint, it separates your personal finances from your business finances. When a sole proprietorship or general partnership is in trouble, all their assets are at risk, from their business finances to the owner’s own home and bank account. The most appealing benefit of an LLC is that all of your own assets will be protected from business creditors. These protections against liability also apply to any actions from your co-owners or employees. LLCs also offer a number of taxation options depending on your needs.
What an LLC Doesn’t Do
Despite all their benefits, LLCs come with limitations. It can’t protect you or your business from any losses incurred from natural disasters. It won’t protect you if you are personally sued or if you have personally guaranteed a loan or contract. If you want to cover all your bases, invest in good insurance and a local business lawyer.
Another limitation faced by LLCs is that they cannot issue stock. Unfortunately, this can make them less attractive to investors. The State of Florida also bars certain professions like doctors and accountants from starting a traditional LLC. Instead they must opt for a PLLC, or Professional Limited Liability Company.
Will an LLC Work for You?
Not every business will be best suited by an LLC. They are primarily used by business owners in industries with a high failure rate or are otherwise high-risk, such as those working in real estate. LLCs can also benefit companies with co-owners or multiple employees, as it will safeguard you from the mistakes of your peers. The scale of your business also comes into play here. Smaller and more independent operations are less likely to fall victim to creditors or court judgements. You may also want to delay forming an LLC or consider other entity options if you’re low on capital. LLCs come with their own fees and require their own bank accounts.
Looking to start a business or grow your current business? Contact FL Patel Law today by visiting our website or calling 727-279-5037.