What is it? The three letters “LLC” go at the end of a limited liability company’s name and actually become part of its official name. A limited liability company is a legal entity formed by one or more persons. The owners are called members, and it may either be member-managed or manager-managed. It’s a small difference, but a member-managed LLC gives each member (owner) an equal decision-making power.
A manager-managed LLC typically has a limit to the number of members who have the power to make binding decisions on behalf of the company, such as entering contracts. Only the managers have the power to make such decisions or give permission to others to make such decisions. The difference may sound small, but it has real significance whenever there is ever a dispute about a decision that the company made.
In addition to its structure, an LLC limits the personal liability of the owners.
Personal liability protection is a huge advantage, because starting a business is risky. When a company does poorly and can’t pay its bills, owners without personal liability protection can see their bank accounts and property drained by creditors of the company. This is the main reason we suggest that startups, even with little funding, consider forming an LLC. The small cost of forming the business is nothing compared to the tremendous protection it affords.
A legal business entity forming under one or more persons is a Corporation. A shareholder is an owner of the corporation. Shareholders aren’t always just passive investors – they can also have internal company titles and positions, like President or CEO.
A corporation generally has officers and directors. Officers, such as the chief executive officer (CEO), are in charge of the day-to-day operations of the company. Elected by the shareholders of the company, directors might make day-to-day decisions. Alternatively, the directors in large corporations are in charge of making the big decisions and delegating management tasks to officers.
The smaller decisions that the officers make are like negotiating for and entering into contracts. Those decisions won’t make or break a company, but they are still binding on the company. An example of bigger internal decisions directors make are whether the company will distribute dividends and when they will distribute them. Those binding decisions will make or break the company.
A corporation, like an LLC, offers personal liability protection. This means that if the company cannot pay its bills, creditors cannot look to the owners’ assets to satisfy the outstanding balance. As long as the owners do not “pierce the corporate veil”, their bank accounts and property will be safe from the company’s creditors and other law suit claimants.
Invest in Florida Today!
Are you thinking about investing your money in efforts to make more? Have you ever considered investing in Florida by creating a business? Your answer should be, yes! With legal help, starting your own personal business can be very easy! There are many reasons for you to think about investing in Florida, some of which are:
- The economic and political stability as well as its geographic location make it optimal for trade.
- Florida also has a pro business and pro technology agenda. MyFlorida makes many business-related functions easy for business owners. MyFlorida is a state-run site that allows
- Florida is a “business-friendly” state because entrepreneurs who incorporate their business in Florida achieve many benefits and few hassles. The biggest benefit of incorporating in Florida is there is no personal income tax, and some corporations are exempt from corporate income tax.
- Florida has business-friendly legal systems and it has some of the lowest annual fees in the country. Furthermore, Florida is home to a skilled, professional, and highly-educated work force.
Although there are sites online which allow you to incorporate your business, it is always best to contact an attorney. This is the foundation of your business, and an attorney will make sure it is a solid one. Additionally, our experienced attorneys can provide insight for drafting agreements, ADA compliance, permits, and other legal matters.
If you have questions about creating your business in Florida, contact us. We look forward to assisting you with your endeavors!