Form Florida LLC - Insider Report

Every desire business owner wants to start a new venture with an appropriate basis. Without an appropriate structure, new business owners will have difficulty focusing on the actual business of the business generating revenue and profits. In addition, failure to properly configure business entities can easily result in a series of chronic problems that affect the entity's revenue.

A Florida limited liability company (LLC or company) has emerged recently as an ideal investment vehicle and entity for business owners and real estate investors. As you can expect, there are many business and legal issues to consider when setting up a new Florida LLC.

There are three objectives of this article. First, I will explain why Florida LLC has become a popular means of investment. Next, I will explain the most important business and legal issues that I have to deal with when setting up a Florida limited liability company. Finally, this article explains why it is important to have experienced and knowledgeable lawyers when forming Florida entities. This will avoid costly mistakes that will deprive your new business from the outside.

Why does FLORIDA LLC become an ideal investment vehicle and entity?

Florida is a shelter for investors and entrepreneurs. One of the main factors that contributed to the popularity of Sunshine State is the advantageous law that dominates a limited liability company. LLC is a hybrid business entity with characteristics of both traditional enterprise and partnership. The main company's characteristics are limited liability. The main partnership's feature is the availability of pass-through taxation (ie, no double taxation).

In recent years, Florida has become an obvious king of LLC. Secretary of State Florida registered 135,851 new limited liability companies in 2007. This company provides an attractive combination for creditors and protection from litigation and free, savvy investors from federal and state taxation.

Priority vehicle for foreign investors

A limited liability company is a preferred means of investment for foreigners who invest in Florida real estate or develop business in Florida. In addition to tax incentives for partnership taxation, it is also a preferred means of investment for passive investors seeking the benefit of limited liability.

More than one person may establish a limited company in Florida. "Person" means either an individual or a group. There are no restrictions or bans related to individual nationality. Therefore, foreign individuals or associations can become the sole member of Florida LLC. As explained later, foreigners can obtain a personal tax ID number from the Internal Revenue Service for the purpose of paying US federal income tax.

The company's business activities have a very wide range of possibilities. Florida law defines the business of a limited liability company as any trade, occupation, occupation or other legal business, purpose, or activity, whether or not it is assigned for profit.

Without the terms of an organization or agreement, each Florida LLC in Florida has the same authority as an individual who does everything necessary to carry out business and business. These authorities include, without limitation, obtaining, holding, possessing, retaining, improving, using, processing other methods, concluding contracts, borrowing funds, borrowing funds, and using funds Invest or reinvest,

Professional Limited · Company

Florida law allows licensed professionals to organize special categories of LLC. A professional limited liability company is organized for the sole and specific purpose to provide professional services and as a member, as other professional limited liability company, professional corporation, limited liability company as a member , Physicians, lawyers, architects, real estate brokers and other licensed experts can get the same protections provided by the LLC form.

Under the laws of the state of Florida, a specialized company, a special limited liability company restricts the members of licensed experts and has specified requirements designed to maintain the integrity of licensed experts It is organized and operated in the same way as traditional LLC with warning that it must comply. For example, a limited liability company is prohibited from issuing capital stock to a specialized company, a special limited liability company, or anyone other than a legitimately authorized or legally authorized individual who provides specific professional services It is. In addition, a professional LLC shareholder enters into a trust agreement or other type of contract that entitles another person authorized to exercise the veto power of some or all of the person's shares You can not.

If you are not a professional corporate, professional limited limited company, or individual, you are prohibited from joining as a member of Professional LLC. Each of these companies must be officially licensed. Professional specialized services organized by limited liability company. Finally, a member of a special limited liability company can not enter any kind of agreement that grants rights to another person authorized to exercise the voting rights of that limited liability company.

Benefits of LLC

The main advantages of Florida limited liability company are as follows.

1. Taxation. For purposes of US federal income tax, LLC will be treated as a partnership without members choosing a limited liability company that is taxed as a single owner, corporation, or C corporation. Taxation as a partnership brings up pass-through of income and obligation attributable to each member and is then reported to the Internal Revenue Service based on the owner's tax returns. Therefore, LLC itself is not taxed. Unlike corporations, there is no double taxation (dividends and taxes on corporate income before contributions to shareholders, taxes on dividends and dividends received by shareholders as income).

2. Limitation of Liability. Members of limited liability companies in Florida are protected from some liability for corporate conduct and debt in the same way that corporate shareholders are protected from personal responsibility for corporate behavior and debt.

3. LLC has far fewer procedures than corporations. There is much less need for administrative document preparation and record management than traditional corporations.

4. Entities are ideal investments for passive investors who maintain flexibility and convenience, protect them from personal responsibility and avoid double taxation.

Attractive means of investing for foreign investors. LLC is far superior to S company. Because S company has only 100 shareholders and shareholders must be citizens of the United States, not companies.

Disadvantages of LLC

We need to be aware of the potential drawbacks of establishing a limited liability company in Florida.

1. The structure of the entity and the role of the principal may be unfamiliar. For example, limited liability companies are owned by members and managed by managers or administrative members. The corporation is owned by the shareholders, and is governed by the board of directors and board of directors.

2. According to Florida law, LLC can operate with either written or verbal agreement, so members who do business without written agreement are likely to encounter many problems.

3. It may be difficult to increase the investment capital of the new company, as some investors may become familiar with the more traditional corporate structure.

4. Creditors often require individuals of new entities to personally guarantee loans of limited companies. Therefore, the member will be individually responsible for the loan obligation of the limited liability company.

5. The principal at Florida LLC uses many different titles of members, managers, or administrative members. For this reason, it may be difficult to actually decide who actually has the contractual legal authority to a limited liability company.

Requirements for FLORIDA LLC Full Name

Florida legislation provides specific requirements for the name of a limited liability company. These basic requirements are the names of LLC:

1. As the last term of the names of all limited liability companies formed in accordance with the provisions of this chapter, it is necessary to include "limited liability company", abbreviation "LLC" or design "LLC". The word "limited" is abbreviated as "Ltd." and "company" may be abbreviated as "Co.". When abbreviations of "limited liability company", abbreviation "LLC", or "LLC" are omitted when using the name of a limited company, the person who deliberately tolerated the person who intentionally participated in omission, or omitted There is the possibility of liability, damage, or liability arising from default of debtor.

2. We can not state or imply that the company is organized for purposes other than those permitted by Article 608, Florida State law and the provisions of that organization.

3. You can not include a language that indicates that the company is associated with a state or federal agency, or a juridical person or other legal entity established under US law.

LLC formation process

In order to establish a limited liability company in Florida state, it is necessary to submit it to the State Bureau by one or more members of a limited liability company or an authorized representative. The organization's article is the initial article of the organization of the LLC, the modified article, the modified article.

Organizational articles are submitted to the Department of State Secretary of Florida State Department, limited liability company name, principal and postal address, registration agency information, manager or administrative members, and expiration date of limited liability company.

As long as a deferred effective date is not specified, the existence of the company begins at the date and time the organization's article was submitted, as evidenced by the end date endorsement of the original document. If that day is within five business days of the filing date, on the day specified in the articles of incorporation of the organization,

The provision of the organization may specify the delayed validity and conformity date of the company's survival and, if so specified, the provision of the organization is valid, the existence of the limited liability company is the specified date and time. If a late expiration date is specified but there is no time, the existence of a limited liability company shall be recognized at the time of termination of the project with the expiration date on the effective date. Article 608 Unless otherwise permitted by Florida State Act, the deadline for submission of documents can not exceed 90 days from the date the documents were submitted.

The Department of State recommends that submitting the provision of the organization comprehensive that all conditions prior to the organization are satisfied, except that the organization revokes or revokes or the organization is dissolved for administrative reasons I have proven to.

Under the laws of the state of Florida, LLC shall not engage in business or take any liabilities, except to obtain any contributions or donations from the organization until the effective date and time of the provision of limited liability .

Management agreement

A limited liability company operating contract is very important to succeed, in order to determine, define and assign members' rights and obligations. Florida legislation has flexibility in the creation of business agreements, but we need to carefully prepare the documents to ensure that the expectations of prospective members are satisfied. Business contracts are not submitted to the Florida state corporate department but are usually maintained as private documents to manage relationships among members, managers, and administrative members.

A business agreement is adopted in the management and regulation of the business of the company and consists of written or verb provisions stipulating the relationship between members, managers, administrative members and LLC. Members of the company may enter into business agreements before, after, or at the time of the provision of the organization and the business contract is the other day specified in the date of establishment of LLC or the business contract.

Florida laws can not give up on certain provisions of limited liability companies. Therefore, a business contract can not do the following.

1. Unreasonably restrict access to information or records.

2. Resolve obligation of loyalty.

3. Unnecessarily reduce the duty of care.

4. Remove honest and fair obligations.

5. Change the requirement to raise the company's business. Egypt

6. Restrict the rights of members, distributors, managers, members or non-relocated persons.

Avoiding responsibility

Most people make building and building assets such as real estate and business very difficult. Because of the nature of social lawsuits, it is important to actively protect these assets. Except as provided in Section 608 of the State of Florida, members, managers and administrative members of a limited liability company in Florida shall, for the reason of serving as a member or administrator or administrative member under the jurisdiction , Court order, or otherwise, may be liable, obliged, or liable for limited liability company. The obligations and responsibilities of members, management members, managers, or other persons may be expanded or limited by the company's articles of incorporation or the terms of the operating agreement.

Asset protection is an important objective in forming LLC. It is important to take concrete actions to protect the following assets and business.

1. Please purchase enough insurance to protect all your real estate and business assets. Maintain written written insurance certifying that your company is insured. If you transfer real estate to the company and you can not get insurance to name the LLC as an insured, the insurance company can refuse the compensation.

We will retain ownership of your real estate assets by the name of your limited company. If a lawsuit involving real estate assets under the company name occurs, LLC will become an advocate, not an individual. This concept is important for the protection of property assets. If the real estate name is written in your personal name, all your personal assets are in danger. In order to obtain protection provided by your limited liability company, it is necessary to actually transfer ownership of real estate to the company by transferring real estate and recording the actions of the county in which the real estate is located. Establishing Florida LLC is a waste of time, effort, money, you can not transfer real estate to a limited liability company. This problem is fairly common, but it can be fixed easily.

3. Manage assets in a professional and rational way. Although LLC can reduce exposure to risk, it can not be completely excluded. For example, suppose you have established a limited liability company in Florida properly and possess real estate assets under the name of your limited company. If you neglect the gas barbecue grill and the grill hurts or destroys one of your tenants, you will become a defender of the lawsuit. To minimize damage to this type of litigation, manage the assets in a professional and reasonable manner by reducing or eliminating the situations that are at risk. For example, instead of personally building a multilevel deck or stairs, hire a licensed contractor and perform this task on your behalf.

Cost to form Florida LLC

Compared to other states in Florida, Florida LLC application and maintenance costs are relatively inexpensive. The new Florida LLC application fee is $ 100.00 and the registration agent fee is $ 25.00. To maintain a limited liability company, you need to submit an annual report (supplementary fee) of $ 138.75 each year. In contrast, the initial fees of limited liability companies in Illinois and Massachusetts State are $ 675 and $ 512, respectively.

Acquire employer identification number

Once a Florida company is established, you need to obtain a federal employer identification number. The EIN application form can be submitted to the Internal Revenue Service (IRS) through toll-free, fax, ordinary mail or the Internet.

The Internet EIN application is the preferred way for customers to apply and obtain EIN. When the application is complete, the information will be verified during the online session and an EIN will be issued immediately. The online application process is available for all entities whose main business, office or agency, or legal residence (if individual) is located in the United States or the United States. In order to use online application, you need an effective tax identification number (social security number, employer identification number or personal taxpayer number) for the principal, general partner, concessioneur, owner, entrustor etc.

Acquire individual tax number

Foreigners who are not permitted to work in the US are not eligible to obtain a social security number. Instead, foreigners can apply for a personal tax ID (ITIN).

What is ITIN?

ITIN is the tax treatment number issued by the Internal Revenue Service. It is a 9-digit number that always starts with number 9 and has 7 or 8 (example 9XX - 7X - XXXX) in the 4th digit. IRS will issue ITIN to individuals who need a US Taxpayer Number but are not eligible to obtain a Social Security Number (SSN) from Social Security Administration (SSA).

ITIN will be issued regardless of immigration status, as both residents and nonresident aliens may be liable for US tax returns and payment responsibilities under the Internal Revenue Code. As long as the individual does not fulfill the exception, we must submit a valid federal income tax return to meet the application requirements and receive ITIN.

What is ITIN?

ITIN is for federal tax return only and is not useful for other purposes. ITIN does not qualify for work in the United States or eligibility for social security benefits or income tax credits. ITIN is not a valid identification other than tax system.

The IRS issues ITIN to help individuals comply with US tax laws and to provide means to efficiently process and account for tax returns and payments to persons not covered by social security numbers To do.

Who needs ITIN?

The IRS will issue ITIN to foreign nationals and others who meet the federal tax return or application requirements and are not qualified for SSN. Non-resident aliens who are not eligible for SSN who need to submit US tax returns to refund taxes under the terms of the US tax treaty require ITIN.

As an example of an individual needing ITIN,

1. A non-resident alien has submitted a US tax return and is not eligible for SSN

2. US resident alien (based on the date of residing in the US) submits a US tax return and is not eligible for SSN

3. Dependent family or spouse of US citizen / resident alien

4. Deputy family or spouse of nonresident foreign visa holder

How do I know whether ITIN is required?

If you do not have an SSN and you are not entitled to obtain an SSN, but you need to submit a federal income tax number or submit a federal income tax return, you must apply for ITIN.

Conclusion

Florida limited liability company is a diverse choice of real estate investment and entity.

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