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When to consider a limited liability company

On Behalf of | Sep 16, 2020 | Business Law |

When you create your own Florida business, you have options as far as how you choose to structure it. The type of business structure you choose affects everything from how you pay taxes to whether you must host annual meetings, so it is important that you thoroughly explore your options before choosing a specific business type.

According to the Small Business Association, a limited liability company is one popular business structure that many people prefer because of the benefits it provides. The LLC combines benefits available through partnerships and corporations, and it is also a relatively easy structure to operate. When might you want to consider an LLC business structure?

When you want to protect personal assets

Among the benefits of LLCs is the fact that they help protect your personal assets. If, for example, someone files a lawsuit or wins a judgment against your company, you should not have to worry about potentially having to surrender your car, home or what have you.

When your business is medium- or high-risk

If the risk of financial failure is high in your line of work, you may also want to consider the LLC. The same holds true if your business operates within a dangerous or high-risk industry, such as hospitality or farming.

When you want a lower tax rate

If you are trying to decide between an LLC and a corporation and taxes are a concern, you may want to give careful consideration to the LLC. Owners of this type of business structure pay a lower tax rate than owners of corporations.