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.
Hi, just came across your blog. I enjoyed it …most informative.
I’ve been reviewing other legal blogs and I book marking the standouts.
Well, needless to say, I have bookmarked your blawg.
I also write a blawg. Actually, it’s more of a collection of Internet Tech tips/observations to inform legal web site owners how to achieve improved search engine standings while avoiding the many Internet scams.
My blawg legal advice library site. is still very much a work in progress. My legal directory San Diego attorneys site is the flagship of our 15 legal directory sites that cover California, Texas and Las Vegas.
Please visit and check them out if you have the time
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?
If you do business in Florida as opposed to Nevada, you still have to register your business as a foreign LLC in Florida and pay the fees, including the annual report fee.
There are benefits to a Nevada corporation for the shareholders of the corporation are NOT public information, nor does Nevada share information with the IRS as with all other states.
It seems to me that forum shopping may be a reasonable and effective way to obtain better asset protection under some circumstances.
The Florida Statutes provide as follows: “The laws of the state or other jurisdiction under which a foreign limited liability company is organized govern the foreign limited liability company’s organization, internal affairs, and the liability of its managers, members, and their transferees.” (Section 608.505) Every state has a similar statute. This is the reason that so many public corporations incorporate in Delaware.
I have been doing research regarding a LLC in Nevada when company will be in Florida and I was told by a company in Neveada that I will not have to file double annual reports or anything else. I will pay them the cost for the LLC annual report along with a resident agent fee which totals $300.00 and that is it. But then I came across a Wyoming site that states that in Nevada you will have to pay the State Business license of $200.00 yearly. So I am realyy confused of who is stating the truth. I am interested in the LLc out of Nevada for the Privacy and the protection. Any one know the real facts about corporating a business out of Nevada or Wyoming? I was told that Delaware is more for bigger and traded companies. This company will be a Pest Control business