Haimo Law - Wills, Trusts, Probate, Business Planning and Asset Protection

Can a victim take an interest in a Florida LLC?

 

Can a victim take an interest in a Florida LLC?

 

By: Barry E. Haimo, Esq.
December 27, 2013

There are several different types of business entities, with each having its own unique advantages and disadvantages. to illustrate the point, businesses may form: general partnerships (GP) or joint ventures (JV), limited partnerships (LP), limited liability companies (LLC), corporations and corporations that elect to be treated as a small business corporation (referred to as a “s-corporation” or “s-corp”). The point of these entities is large part to limit the exposure to liability that owners, investors and shareholders may face with respect to the business operations.  There are requirements to remain compliant with the law.  If compliant and no wrong-doing occurs by the shareholders, these entities all do a good job of protecting the owners from creditors of the business, or “inside creditors”.

It is unbeknownst to most people, however, is that these business entities are very different with respect to how they protect investors’, owners’ an shareholders’ interests in the entities from their personal creditors, or “outside creditors.” You are less protected from your personal creditors with a single-member limited liability company (LLC) or a corporation (regardless of whether it elected to be treated as a small business corporation, or s-corp). In other words, you are exposing yourself to unnecessary liability and you are at risk of having your business being taken away from you to satisfy a judgment. With multi-member limited liability companies (LLC) and limited partnerships (LP) in Florida, you are much more protected from losing your business interests, at the expense of slightly less favorable income taxes. That being said, you absolutely must structure them and operate them properly in order to ensure that you can enjoy the benefits they provide. In addition to limited personal liability exposure to both inside and outside creditors, there are other benefits of limited liability companies (LLC) and limited partnerships (LP) as well. Be sure to properly educate yourself and retain competent professional representation before embarking on a potentially dangerous journey in the wrong direction with single-member limited liability companies (LLC) or corporations. Contact us, we can help.

Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose
Email: barry@haimolaw.com
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