There are many corporations which you can make but the most popular ones are Limited Liability Corporation (LLC) and the S corporation. The business owners sometime get confused on which corporation to develop. Each corporation has its own advantages and disadvantages. So it is always better to consult your legal advisor for this.
Here is a comparative study of the two systems for business owners in Florida.
:?: An overall view of Limited Liability Company
As per the law the LLC is one type of legalized business which gives the owners protection from liability. The owners are always referred as members. To form the LLC you have to file an article with the concerned state government authority especially the Secretary of State. For example for having a LLC Florida the incorporator need to file articles of incorporation with the Florida Department of State. The articles will contain the details for communication with the office, its incorporators, directors and its officers working under the directors. The article will also contain the detail list of share classes and the number of shares and its value in each class.
The state government has to declare these articles publicly. Apart from the articles of organization there must be a private agreement so that there will be no confusion regarding internal matters of the LLC like distribution of profit, membership, and management of resources, etc.
:?: Characteristic of Limited Liability Company
- Under this Corporation the members are free from debts thus they get the liability protection. This means that in case of any losses the members personal assets are not in danger. Only the properly belonging to LLC will be in danger. So the creditor can only demand the LLC Property. Except that nothing else cam be demanded by the creditors.
- LLC is governed under pass-through taxation. There is no double taxation for any personal income or financial transaction.
- Mode of operation is very easy in LLC as you don't have to arrange annual general meeting, there is no risk in losing authority of your business to a board of directors
Corporations as a Whole
According to law Corporation is an entity which has its own distinct identity which is different from members and shareholders. Like an individual business corporation has their following distinct feature:
- It will have assets
- There will be no harm in having a contract with other legal entities.
- They can also take legal action against any other entities or viceversa.
- You can have registered agents
- There are also provisions of making bylaws for its internal affairs.
Like LLC corporations are also formed in similar ways. For example to file Florida Corporation the incorporations have to submit articles like in case of LLC.:yes:
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