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What is an LLC?

On Behalf of | Sep 22, 2015 | Business Formation & Planning

When you are considering the creation of a start-up company in Florida, one of the first decisions you will have to make is what type of business you want to create. By this, we mean what operational structure will you utilize? Options include a sole proprietorship, a partnership, a corporation and a limited liability company, or LLC. This latter category has grown in popularity among many people in recent years and offers unique features.

As explained by the U.S. Small Business Administration, an LLC combines some elements of a traditional corporation with that of a partnership. In some ways, it offers something of the best of both worlds. Corporations had become popular because they protected owners against personal liability. However, their complex procedures can feel onerous, especially for smaller companies. Partnerships, on the other hand, offer great operational flexibility and manageability but owners remain exposed for personal financial liability.

With an LLC, an owner—referred to as a member—is guarded against financial liability personally in most cases. Instances including illegal actions, for example, will not offer such protections. At the same time, the management and paperwork involved with an LLC is dramatically simplified when compared with to a corporation. Creation of an LLC includes the development of Articles of Organization and an Operating Agreement. The business name, which has to be unique and include the reference to the LLC status, must also be registered.

You can learn more about how to approach the ownership and the formation of a new business in Florida at our business setup webpage.