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The Dangers Of Single Member LLC's In Florida

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Hi I am Robin Platzer and this is your Two Minute Tax Tip On- The Dangers Of  The Single Member LLC in FLorida

Today we are going to be discussing problems with forming a single member LLC in the State of Florida.

There's a lot of confusion when it comes to forming an LLC in the state of Florida, because a lot of people believe that if you form an LLC in this state and you form a single-member LLC that you're protected from liability. And unfortunately that's just not the case. In the state of Florida we have something called a "charging order" and what that means is let's say you own a restaurant  and your restaurant is held in the form of  a single member LLC. And one day a customer slips and falls in your restaurant well the slip and fall happened in your restaurant that's called "inside liability" so the customer can sue just the restaurant and not you personally.  

Now let's look at another scenario let's say that you're driving down the road one day and you get into a car accident and the accident is deemed to be your fault. And the person that you get  into the accident with discovers that you are the owner of a restaurant and they decide to sue you personally for medical debts.  Believe it or not they can actually sue you for a portion of the interest in your restaurant meaning  that the courts can actually say that part of  your profits are going to  go to the person that you hit in the accident.  So as you can now see as a a single member LLC you are not protected from outside liability.

The best way to protect yourself and your assets in a state of Florida with an LLC is to form a multi member LLC . Multi member LLC's have more than one member and it doesn't have to be a fifty-percent member it can be as little as 1% and it can be somebody in your family or a friend that you trust . And the reason this works is that courts can't sue both of you for your auto accident, they can only go after you and a multi member LLC makes that impossible.

So again the best way to protect yourself especially if you have lot assets in your business and at home is you are going to want to form a multi-member LLC or a Corporation. Now don't forget if you are registered in Florida as an LLC and you take an S election, that S election doesn't protect your assets, that S election is just how you are taxed by the IRS.  So if you are a single member LLC and If you want to protect yourself and your assets you're going to have to make yourself a multi-member llc.

My name is Robin Platzer please like, share or comment on this video and if you need my services you can reach me at (941)377-6797 or Connect with Robin on Google+

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