Can My Business Operate as an LLC in Florida?
If you are starting up a new business this year, one important consideration is how that business will operate, or, in other words, your choice of business form. For many new businesses these days, the LLC is a popular choice. In fact, according to the Department of State, Division of Corporations, there were well over one million active LLCs operating in Florida in 2019. (Corporations made up the next most popular business form, with nearly one million total active corporations (including domestic profit corporations, domestic nonprofit corporations and foreign profit and nonprofit corporations) operating in Florida in 2019).
What are Some of the Powers of a Florida LLC?
Florida law grants LLCS broad powers, rights and privileges. Essentially, the LLC can do anything necessary or convenient (and obviously lawful) in service of carrying out its business affairs.
Among the activities that the law permits an LLC to undertake are:
- bringing and defending lawsuits
- owning, purchasing, leasing and otherwise dealing with personal or real property
- selling, mortgaging, granting an interest in, leasing, or otherwise encumbering its property
- buying, selling, or otherwise disposing of or dealing with shares or other interests or obligations in another entity
- entering into contracts, borrowing funds, taking on debt obligations, committing to guarantees or suretyships
- lending money and investing money
- choosing managers, officers and personnel, defining their roles and compensation
- make charitable donations on behalf of the LLC
- establish and pay retirement and benefit plans
What are Some Advantages of a Florida LLC?
One of the most popular and often touted advantages of an LLC is that it shields its members from individual liability. Generally, Florida law provides that LLC liabilities and debts are the sole liability of the LLC. For this reason, LLC members and managers are not personally liable for any of the LLC’s debts based on their roles as LLC members or managers. Under this law, the fact that an LLC fails to observe formalities related to its business affairs will not support the imposition of liability on a manager. Also, with some exceptions, Florida LLC law shields LLC members and managers for liability for any statements, votes, decisions, or failures to act with respect to management or policy decisions. (Among the exceptions are criminal acts, acts that involve self-dealing or are against the LLC’s interests, and intentional or reckless acts exhibiting a disregard for human rights, safety or property).
Other advantages of Florida LLCs are that they are relatively easy to set up and operate. Generally, LLCs allow less complicated management and recordkeeping than other business forms. Additionally, there are tax benefits that are associated with LLCs operations, known as “pass through” taxation. Generally, this tax benefit means that LLCs avoid double taxation — profits are “passed through” the business to individual owners.
Starting up your new Florida business as an LLC can be an exciting and busy time. For advice and professional legal assistance in setting up your LLC, contact the Fort Lauderdale business attorneys at Sweeney Law.