Florida Limited Liability Company (LLC)

An LLC is a relatively new entity created by state statute.  The LLC is a type of hybrid business structure that is designed to provide the limited liability features of a corporation with the tax efficiencies and operational flexibility of a partnership.  Formation is more complex and formal than that of a general partnership.

The IRS did not create a new tax classification for the LLC when it was created by the states; instead IRS uses the tax entity classifications it has always had for business taxpayers: corporation, partnership, or sole proprietor.   An LLC can choose how it wants to be taxed: as a C Corporation, as an S Corporation, as a partnership, or even as a sole proprietorship.   If the only member of the LLC is an individual, the LLC income and expenses are reported on Form 1040, Schedule C, E, or F, unless form 8832 is filed to make a different entity classification election.   LLCs with more than one member file a partnership return, Form 1065, unless form 8832 is filed to make a different entity classification election.  

An LLC is owned and operated by its members, who hold "interests," rather than shares of stock.   One of the benefits LLCs have is protection for their owners in the event of a lawsuit.   If a lawsuit is filed against you personally, your personal assets are at risk.   When you own stock in a corporation that stock is considered a personal asset, so your stock could wind up being owned by someone else and depending on your particular ownership and bylaws they could vote to sell your buiness's assets.   With an LLC, this usually can't happen as creditors are usually prohibited from seizing someone's LLC ownership interests.

Florida Statutes Chapter 608, regarding LIMITED LIABILITY COMPANIES