LLC vs. Corporation
Orlando Business Organization Attorneys
The use of a LLC as a business entity selection has flourished since the 1980s. It has become the common perception that the limited liability company is the appropriate option for ALL entrepreneurs and investors starting a business or investment. While the LLC does have many benefits over the traditional S-corporation, it should not be selected without the experienced advice of a skilled business organization lawyer.
At Pierce & Associates, our attorneys have decades of experienced advising business professionals and real estate investors. We understand the statutes which affect business owners and work to ensure your interests are protected by your choice of business entity. Contact our central Florida law firm to consult with an experienced business attorney regarding your business organization questions.
LLC vs. Corporations: What is Right for You?
- LLC: Limited Liability Companies follow the tax principles imposed on partnerships (single taxation). However, unlike partnerships (where partners can be held personally responsible for debts and claims against the business), members of a limited liability company are shielded from personal responsibility for the debts and claims against the business.
- Corporation: Corporations are subject to double taxation (profits of the corporate entity are taxed, as well as profits earned personally by the shareholders) unless the corporation elects to be taxed as an "S" Corporation, in which event there is no tax at the corporate level. However, members of the corporation have limited liability from claims against the corporation if all statutory guidelines for a corporate entity are followed.
Regulatory Compliance: Paperwork that makes a difference
While there are significant benefits to operating a LLC or a corporation, there can also be problems if statutory guidelines are not followed. Therefore, it is critical to consult with a skilled business lawyer to ensure that your business is compliant.
- LLC: Under the Florida statutes, a limited liability company must register its Articles of Organization with the Secretary of State. However, not all members of the LLC are required to be listed. In addition, operating agreements can be written or unwritten. Therefore, without experienced business law advice, some LLC members may place themselves in considerable risk.
- Corporation: In order to be shielded from liability, a corporate entity (and an LLC) must follow statutory requirements. There are more details beyond filing the Articles of Incorporation. A corporate entity must elect officers and directors, issue shares to shareholders, hold regular meetings and document meeting minutes, and regularly document other pertinent information. Failure to do so can result loss of the corporate form; and the members may be held personally responsible for debts and claims against the business (known as piercing the corporate veil)
More Information on Starting a Business:
For assistance with the formation of a LLC or to discuss business organizational needs with a skilled attorney, contact our Orlando law office. Call us at 407-898-4848 or fill out our intake form online.