Florida LLC
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A limited liability company that is classified as a partnership for Florida and federal income tax purposes is required to file Form F-1065 if one or more of its owners is a corporation. In addition, the corporate owner of a limited liability company that is classified as a partnership for Florida and federal income tax purposes must file a Florida corporate income tax return.
A single member limited liability company that is disregarded for Florida and federal tax purposes is not required to file a separate Florida corporate income tax return. However, the income of the company is not exempt from tax if it is owned by a corporation, whether directly or indirectly. In this case, the corporation is required to file Form F-1120 reporting its own income, together with the income of the single member limited liability company.
A Florida LLC satisfies a necessary condition of your business planning developement in that it meets the requirement that you establish a legal form of organization in order to gain the statutory benefits and protection available in Florida to your LLC. Your Florida LLC establishes a legal presence within the state, which you can use either as a platform for in-state operations or by registering your Florida LLC via your agent's physical address in order to meet the purely statutory requirement for tax and filing purposes absent an in state operation.
Advantages and Disadvantages of a Florida LLC
Advantages of LLC
- Limited Liability: Owners of a 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 Through 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.
Disadvantages of LLC
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By Florida and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial Florida LLC members, the name and address of your Florida registered agent, the details of which will be introduced into the body of your LLC operating agreement and related Florida LLC formation documents assembled for application to the state of Florida.
Florida's 2009 Business Tax Climate Ranks 5th
Florida ranks 5th in the nation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Georgia (27th) and Alabama (21st).Florida Levies No Individual Income Tax
Florida is among seven states in the country that collect no individual income taxes. Since most small businesses are either S Corporations or partnerships or sole proprietorships, they pay their business taxes at the rates for individuals. This makes the tax environment for small businesses in Florida very competitive compared to other states.Florida's Corporate Income Tax System
Florida's corporate tax structure consists of a flat rate of 5.5 percent on all corporate income, which ranks 40th highest among states that tax corporate income. In 2006, state-level corporate tax collections (excluding local taxes) were $132.99 per capita and ranked 31st highest nationally.Home | Florida LLC advantages and disadvantages | Site-Map
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