Miami Business Owners: Get a Legit LLC

miami florida at nightMiami is a great place to live and work. Almost every day of the year after a long hard day of work you can take a swim or play a round of golf in Miami’s beautiful sunshine. However, Florida’s positive business culture and great weather do nothing to protect your personal nor business assets in today’s litigious environment.  Experts all recommend forming an LLC Limited Liability Corporations for small businesses as the best entity organization form for multiple reasons.

Florida state has very specific requirements and ongoing reporting rules for LLC formation. All Miami LLCs must submit Annual Reports by May 1st, submit state taxes, obtain a Federal Tax Identification number EIN and also a Florida State tax identification number.

Pros and Cons of Limited Liability Company LLC in Florida State

Positives

Tax savings

The IRS does not tax LLCs separately, as some corporations are taxed. This gives business owners greater flexibility in tax planning which can save substantial money on taxes. Limited liability companies can have members, partners or even corporations as owners. This versatility allows each person to plan their tax strategy for their own particular needs.  The Operating Agreement is the document that details how the LLC will be taxed and managed.  Be sure to get qualified legal advice when setting up your LLC because the IRS will classify some types of LLC’s as corporations automatically.

Less Paperwork

The main document required is the LLC Operating Agreement which is created while setting up the LLC. Limited Liability Companies requires far less paperwork and reporting than traditional corporations such as C-Corp or S-Corp.  Be aware that each state has specific rules governing LLC rules, read more about Florida’s requirements here at the DOS Department of State website – http://dos.myflorida.com/sunbiz/forms/limited-liability-company/

Reduced Liability

The top priority of most businesses is to reduce their liability in the case of product malfunction or bodily injusry resulting from their product or service usage.  LLCs will prevent business owners from being personally responsible for debts and court judgements against the business. Business creditors are also legally prevented from going after the personal assets of LLC members. This offer far nmore protection far greater than a sole propriertshp or partnership.

 

Negatives

 

Pay Taxes as Self Employed

If you do not use the corporation tax structure option for your LLC you will be charged self-employment taxes. All profits from your business in the LLC will be taxed as personal income tax.  Sometimes this can mean higher tax rates. However, you will save money by not paying federal taxes such as Medicare and Social Security. Thus it is imperative to hire a good legal service such as top rated Legalzoom to have your LLC both legit and set up properly.

Role Confusion

Unlike Corporations, LLC do not have clearly defined job descriptions such as Director, Manager, and Employee. Investors often find the blurred roles confusing and can overstep their position and try to interfere with the daily management of the business. As such, it is vital to clearly delineate these functions in your LLC Operating Agreement.

Short Life

Unlike Corporations, when one of the members leaves the LLC, it essentially “dies” and ceases to exist, while a Corporation continues beyond the initial group of individuals that founded it.  Again, this is important information to include in your LLC Operating Agreement.

 

 

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By Marsha Kelly Business Blogger – Serial entrepreneur, after doing Time in corporate America, who has learned about what products and services really work well in business today. You can learn from my experience and my associates as we shop from the internet for tools, supplies, and information to build our businesses and improve the lives of our family and ourselves on our site http://best4businesses.com/

My strongest belief is that the safest, most secure and most lucrative job you can have is owning your own business. I learned this valuable lesson the hard way by investing time, energy and emotion into a corporate career only to be fired unceremoniously –when I dared think creatively outside the box. My entrepreneurial journey to starting my own business was first by necessity but then turned into a great blessing of prosperity and freedom. Graduating from the school of business hard knocks and learning how to start, manage, and then sell my business for over $1,000,000. Learned more about real life business this way that I learned in my four years at the NYU School of Business.

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