Starting a business can be a very exciting time for eager entrepreneurs, but deciding what kind of business to form can be a difficult decision. If you are starting a business on your own, then something to consider would be the single-member limited liability company model.
Single-member limited liability companies (SMLLC) is just like a regular LLC, but only has one owner and is registered in the state where the company does business. In this model, the singular owner has all the benefits and pitfalls of other LLCs. A SMLLC is formed by filing your Articles of Organization and paying a filing fee to Florida’s department of state in the business division. Once this is done, form an operating agreement to better solidify how the business will be run. The SMLLC is a separate entity from the businessowner and is not associated with the owner for tax and liability purposes. SMLLCs are a type of disregarded entity. This means that the IRS taxes through the Schedule C portion of the owner’s personal income filing instead of taxing the business itself. You also will need a registered agent for your SMLLC who can receive legal correspondence to the company.
Something important to consider here is asset protection. A SMLLC can act as a shield to protect your assets as an individual from the liabilities that the business has. This is similar to an LLC. Sole proprietorship, a different option if you want to start a business on your own, does not provide this kind of protection. As stated above, an SMLLC effectively separates the owner’s personal assets and the business’s liabilities. While the setup cost for a sole proprietorship may be less, it will give you no protection if something unfortunate happens with the business.
At Kendrick Law Group, we understand that starting a business can come with a lot of questions. Our expert attorneys know exactly how to answer those questions and guide you through the business starting process. Contact us today to schedule a consultation and learn more about the different types of business entities and how they might fit you best.
Cowritten by Layne Cohen, Law Clerk