Florida LLC vs. Nevada or Delaware
I received an email today from a blog reader who is interested in establishing a limited liability company for asset protection purposes. The reader suggested that Florida may not limit creditor remedies to charging liens against LLC interests and that Florida residents are better served by an LLC created in Nevada or Delaware.
In almost all cases, I find no advantage for Florida residents to filing an LLC in states other than Florida (with exception of Delaware series LLC in special cases). The Nevada and Delaware LLC laws are "sold" on the internet as asset protection tools, and many people have sought out these LLCs. The Florida statutes specifically provide LLCs the same asset protection as available to limited partnerships. People in Florida should not pay more money for an LLC located in any other state.
I solidly concur with the comments regarding Nevada. If you seriously believe that Nevada entities offer some better level of protection then your own local state, I suggest moving yourself (and the asset you want to protect) to Nevada.
Caveat: Some states (including my home state of Washington) might not offer the same degree of charging order protection for an LLC interest as they might for other entities (say a limited partnership). There are ways to effectively plan around that issue (whether it is perceived or real). There is an article on our website at http://www.lklawgroup.com/articles that discusses the difference in protection offered by an LLC and a LP.
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The concept of a "series LLC" was recently touted as a reason to form a Deleware LLC. As I understand it, a series LLC can protect multiple assets in a single LLC while protecting each asset from liabilities assoicated with the other assets in the LLC (e.g. multiple renal properties which we would never reccommend titling in a single Florida LLC because of the risk of "cross-contamination").
I would be interested to hear your thoughts on this concept.
need lowest cost series LLC, nevada or Delaware
Great website! What statute do you see that says the same asset protection features available to an FLP also extend to an LLC? I know statute limits creditor remedy to charging order with respect to an FLP, but did not know the same held true with LLCs in Florida (i.e., presumably a judicial foreclosure is available for LLC interests.)
Nevada LLC's are cheaper than Florida LLC's by $50 so why wouldn't I incorporate in Nevada if it is cheaper?