Today, there are about 2.5 million small businesses in Florida. This makes up 99.8% of businesses in the state, and employs 3.3 million workers – which is almost half of the state’s private sector workforce. That’s a whole lot. And LLCs are the fastest growing type of small business structure, across the whole of the U.S. Here are just a few reasons why.
According to the State Business Tax Climate Index in 2011, Florida was ranked fifth in the nation for having a favourable tax climate for business owners. Florida is well known for overall having a low tax burden. It’s one of only 7 states that don’t have a personal income tax on earnings, which makes it a very attractive state for pass-through entities like LLCs. There aren’t any extra business taxes found in other states – it’s simply your normal average taxes. The state sales tax is at 6%, excluding necessities like groceries and medicine.
Some business owners are actually taking their businesses and moving solely for the tax advantages. For example: Daniel DiGiaimo, the CEO of Baker Street Funding, is moving from the state of New York to Florida, and says he is doing so because it is ‘a huge saving both personally and professionally’.
More access to capital than you’d think
Lots of entrepreneurs in Florida report plentiful access to capital to start and grow their businesses in Florida. It’s home to not only 150 banks across the state, but also lots of investment capital, from venture capitalists and angel investors that support startups.
All too often do people think that to be successful you have to be in a huge metropolitan area like New York or Silicon Valley. Andy Latimer, CEO of Bluewater Media, says ‘the stable business environment in Florida marks business here ripe for investment’. Florida has a lot more investors than you’d think, and it’s more sustainable to live here, AND you can still access large markets you think you’d be missing out on through technology, which is only improving.
People used to think of Florida as just the ‘Sunshine State’. Today, however, it’s home to many economic hubs, and is considered an incubator for innovation and startups. It’s promising and cost effective here.
Flexibility in running your LLC
LLCs in all states tend to have no restrictions on the number of members you’re allowed to have, and members have flexibility in how they structure the management in the company. In Florida, LLCs can also select varying types of distribution on profits, which is another perk. Unlike other business types like partnerships where the split is 50-50, LLCs have more room for flexibility, to ensure fairness.
Lack of formalities
There are also much less formalities. With corporations you have to do many things, such as holding annual meetings and recording minutes or resolutions. If you have an LLC in Florida, you don’t have to do any of that. You’re free to run the business exactly as you’d like to. You can even choose to make an operating agreement or not – it’s up to you. However, holding annual meetings, documenting major business decisions and having a basic operating agreement is still recommended, in order to avoid future civil disputes in the company as well as having something to look back at to track progress.
Affordable cost of living
Living in Florida can seem a little pricier than other U.S. states on average, but it’s much more affordable than lots of other major economic hubs in the country, including New York, Chicago, D.C., San Francisco and LA. This means you’re still in a decent place where you can thrive in a business landscape while also living a sustainable, comfortable lifestyle.
LLCs are a huge part of the American economy now, and aren’t looking like they’re going to die anytime soon. It fits so many businesses, so it may be the right type for you today.
TRUiC shows one of the easiest ways to form an LLC in Florida. Visit their site for more.