Forming an LLC

Roy Oppenheim from Oppenheim Law spoke about the characteristics and considerations of Limited Liability Companies (LLCs). He mentioned the ease of forming an LLC due to their flexible tax structure which allows them to be treated as either an S-Corp or a partnership. However, he cautioned that this could sometimes result in higher individual income taxes due to FICA taxes. He also brought up potential liability issues, especially with single-member LLCs in Florida, which may not offer asset protection. On the other hand, the flexibility of LLCs allows for more complex structures like having an S-Corp or another LLC as the manager. Finally, he highlighted a new requirement starting from 2024 that mandates all LLC owners to disclose their identities to the federal government.

Hi, Roy Oppenheim here for Oppenheim Law. I wanna talk a little bit about LLCs, because people love forming them. On the one hand, they’re very easy to form because they don’t necessarily file their own tax return. You can elect to be either treated as an S-Corp or as a partnership. One of the problems with LLC sometimes is that you end up having to pay more individual income tax because there’s some FICA taxes that you may have to pay that you wouldn’t necessarily pay as an S-Corp or even as a C-corp. Having said that, there are also some liability issues. If you’re forming a single-member LLC in the State of Florida, there’s no asset protection necessarily, but they are very useful instruments that we use regularly.

And they can be very simple, they can be complicated. You can nicely have an LLC. So, you can have an LLC or sub-S-Corp owning the LLC as a manager. And so, you can surely protect your liability using an LLC and using other entities. Of course, starting in 2024, you will have to disclose to the federal government who the actual owners are of your LLCs, as well as of any legal entity whatsoever. So, that’s something that you will need to talk to us about, going forward. So, Roy Oppenheim, “From The Trenches.”