LLC and C-Corp Comparison
Law Office of David M. Goldman PLLC represents individuals and Florida Businesses in Jacksonville and the surrounding areas in Florida Business law and Florida Business Formation. Our Florida Business Attorneys and Florida Business Lawyers work with clients in to help them choose the correct entity to use when conducting business.
The Florida C-Corporation is similar to a member managed LLC in control, but is always better than a Florida C-Corporation in respect to the tax effects. A Florida C-Corp is taxed at the corporate level and then again at the individual level. This double taxation is a significant disadvantage of using a C-Corporation for your business entity.
If you select the default tax treatment for a Florida Limited Liability Company the members or owners are taxed the as if they had a General Partnership or Sole Proprietorship. That is the income of the LLC will "Pass Through" to the individual and they will be taxed as if they had earned the income themselves. With a Florida C-Corp, the individuals are taxed at the same levels on salary, but the distributions are not counted as ordinary income but as capital gains and thus do not have the same amounts of SSI and Medicaid deducted. The C-Corp also has a corporate level of taxation on the earnings of the company. In a C-Corporation it is possible to be taxed on salary, distributions, and corporate earnings. The taxes can be significantly higher than with a Limited Liability Company. In addition the owners of a Florida Limited Liability Company can elect to be taxed as an S-Corporation to further reduce the potential tax treatment of the entity.
While both the Florida LLC and the Florida C-Corporation offer protection of the owners' individual assets from liabilities of the business entity, only the Florida Limited Liability Company can protect the business ownership or stock in the C-Corp from creditors of the owners, shareholders. These protections are only available with the Florida LLC when it is properly structured to take advantage of the Florida Charging Order for its members.
Both the Florida Corporation and the Florida LLC require more formality a sole proprietorship but it generally amounts to no more than a few hours of time a year.
If you need help with starting or managing a Florida Business CONTACT our Florida Business Lawyers by email or call us at 904-685-1200 to discuss your situation today.