What are the specific differences between an LLC and an S-Corp in the state of Florida?
What are the differences between a Florida LLC and a Florida S corporation? Generally, the 2 best choices for small businesses to consider are becoming an LLC or a Florida S corporation. Some differences between LLCs and being a Florida S corporation are: 1. “Memberships” v. Stock Issuance: LLCs cannot issue stock, but rather, they offer “memberships.” S corporations, on the other hand, can issue stock and are owned by the shareholders. 2. Management: A Florida S corporation is managed by its directors and officers, while LLCs are managed directly by the members unless they hire managers. 3. Restrictions: A Florida S corporation has some restrictions which are not applied to LLCs. For example, A Florida S corporation is limited to 75 shareholders, while the number of members in a Florida LLC is not subject to any restriction. 4. Life Span: A Florida S corporation has an unlimited life span, while LLCs have a limited life span (in most cases around 30 years). Sources:
By forming an LLC instead of a corporation, you get all the benefits of forming a corporation but you avoid a few drawbacks that you would run into if you formed a corporation. Specifically, when you form a corporation, you subject yourself to double taxation and excessive paperwork. Both of those annoyances can be avoided if you form an LLC. See also: http://www.limitedliabilitycompanycenter.com/llc_disadvantages.html http://www.legalzoom.com/llc-state-requirements/Florida-LLC.html http://www.residual-rewards.com/florida-s-corporation.html Sources: http://www.gaebler.com/LLC-Advantages.
