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What are the restrictions of forming a Florida LLC?

The restrictions placed on LLCs are not placed by the Florida Division of Corporations, but by the federal government. These restrictions include:

  1. Limited Life Span: LLCs typically have limited life spans. LLCs must list a dissolution date in the Articles of Organization. In addition, certain events such as the death or withdrawal of a member can cause the LLC to dissolve. In contrast, Florida State corporations have perpetual existence.

  2. Difficult to Raise Outside Capital: LLCs do not have stock, therefore they don't get the benefit of stock ownership and sales. This makes it difficult for LLCs to raise capital from outside sources. In contrast, Florida State corporations can issue stock.

  3. Minimal Liquidity: The interest in a Florida LLC is not freely transferable. Generally, other LLC members must approve of transfers of interest. Therefore, the LLC interest holders have minimal liquidity. This is an additional reason that it is difficult for LLCs to raise capital from outside sources.



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