LLC in the USA
In the United States, the most common type of company for small and medium-sized businesses is the Limited Liability Company (LLC). Profits pass through the company directly to the members (the partners of the company) without being subject to corporate income tax. The income is then subject to only personal income tax according to the tax brackets of the respective members. This avoids double taxation and preserves a greater amount of the profits to the benefit of the members.
The advantages of creating an LLC in Florida are:
- No taxation at the level of the company itself (unless the option is requested);
- Possibility of choosing the tax status of the company (pass-through or as a corporation);
- The personal liability of members is limited to their level of equity in the company;
- Personal assets of members are protected with an LLC in the US;
- Creditors for personal debt cannot seize assets of an LLC, nor take control of the voting rights of a member;
- Flexibility in distributing the profits of the company;
- Unlimited number of members;
- Flexibility of the organization of the LLC through the freedom of writing of the operating agreement;
- Simplified business governance because the Operational Agreement does not need to require excessive administrative formalities such as Minutes and Board Meeting, etc.
Creating an LLC in the United States, and specifically in Florida, has many advantages for those who are looking for advantages for their offshore company.
The C Corporation in the USA
The C Corporation is typically used by large companies that have investors that are not involved in running the company or are publicly traded.
The benefits of C Corp are:
- Distinct personality between the company and its shareholders
- Taxation of profits and losses in the company
- Possibility of raising capital through the sale of shares
- Easy transfer of shares
There are other types of companies in the US, but not all of them are available to non-US residents, for example, the Sole Proprietorship and S Corporation. Our site focuses the Limited Liability Company (LLC) because it is the type of company that usually meets the needs of our customers.
Create an LLC in Florida: What are the benefits?
Creating an LLC in Florida has many benefits that are important to know when you want to start your offshore company in the United States. Here are its main features:
- Personal protection against debts: Your personal and family assets are always protected from any liability incurred by the company.
- Professional Debt Protection: LLC in the US is the only type of corporation that prevents personal lawsuits and debtors from liquidating your business in response to a judgment.
- No limit on the number of members: you can have as many members as you want in an LLC in the US (natural persons and/ or legal entities).
- Flexible management of the company: the manager can be either a member or a third party.
- Flexibility of the tax status of the company: you can choose the tax status you want, and change it every 5 years as necessary. So you can create an LLC in Florida and be taxed as a C Corp.
- No separate tax return: only one tax return (IRS Form 1065) showing the profits and losses of your company.
- Flexibility in profit distribution: you can spread the profits of the company as you wish, regardless of the percentage of capital held by each partner.
When you set up your offshore company in Florida, you will have to make the choice between the LLC and the C Corp. This is will be your decision that should be based on your needs and the goals you have for your company, however, we usually advise our clients to choose the LLC because of its flexibility and advantages. If you want to know more or if you need help setting up your company in the United States, do not hesitate to contact us.