The limited liability company (may be designated, for example, as the XYZ limited liability company, or XYZ, LLC or XYZ, L.L.C.) is a creature of statute. For some professional practices, the personal services rendered by certified public accountants, public accountants, chiropractic physicians, dentists, osteopathic physicians, physicians and surgeons, doctors of medicine, doctors of dentistry, podiatric physicians, chiropodists, architects, veterinarians, attorneys at law, and life insurance agents a professional limited liability company (may be designated in a number of ways, such as ABC, a professional limited liability company or ABC, P.L.C. or ABC, P.L.L.C or ABC, PLC).
The reasons for the delay were that Florida had to resolve issues over how to treat the new business entity and how to tax the new business entity. Florida decided that since it had a well-established foundation in determining disputes under its corporation law that it would apply those same decisions to the new limited liability company structure.
That left the remaining question of how would Florida tax this new business entity. Finally, the legislature decided that they would leave the taxation question to be resolved by how the federal government handled the taxation of these new business entities. So corporations would be taxed as corporations and partnerships would be taxed like partnerships and sole proprietors would be taxed as sole proprietors.
To set up an LLC, you need to have a name that is not misleading to the public or to other businesses. You must file paperwork with the Division of Corporations, which is run by the Secretary of State’s Office. The paperwork is called the Articles of Organization.
Next, the LLC has to have members. To afford the LLC all of the intended protections of the statute you should have multiple members. If you are not looking for the ultimate protection of the statute then you can be a single member LLC. Under current Florida law, husband and wife are considered to be the same person. So for complete protection under the statute, a family LLC should consist of husband, wife and children.
If it is a professional limited liability company, then all members of the PLLC must be similarly licensed. So, if it is a medical practice that chooses to be a PLLC, then all members of the PLLC must be licensed physicians. Employees of the PLLC such as nurses, nurse assistants, etc., of course, would not be members of the PLLC.
Because of the superior protection of the limited liability company statute, the limited liability company has overrun the creation of corporations. I recently read that limited liability companies have reached an annual filing with the Division of Corporations of approximately 100,000. It has truly become the more favored way of doing business in this state and in this country. It also eliminates some of the confusion that European and Latin American countries had over our use of corporations.
The prevailing opinion of most asset protection attorneys is that the limited liability company is the preferred business entity for those businesses that could be exposed to potential liability. Such endeavors would include manufacturing, professional service businesses including doctors, lawyers, (see above) and the ownership of real estate.
As the limited liability statute is continuing to evolve, it is best to discuss your business set-up and asset protection needs with an experienced attorney.
Another form of asset protection can be afforded through the use of the Family Limited Partnership. The FLP is useful for the ownership of assets that do not create exposure to potential liability. For example, the ownership of stocks, bonds, mutual funds, collectibles, life insurance, paintings, art objects, etc.
For those that are really wealthy, the best recommendation is to establish offshore asset protection strategies in conjunction with your onshore strategies. I am fortunate in that I work with one of this country’s leading offshore experts. If the need exists to establish one of these offshore strategies to protect your property, then I would be most happy to introduce you to him and work with you and his firm as you or he sees fit. I leave all planning to you and him and I just offer my services in an administrative capacity.