In the business world, it’s always been said that you need to make your next move your best move… as an entrepreneur, every business move you make is detrimental to the overall success of your business, especially when forming an LLC. It’s common knowledge that an LLC is a legal entity that provides business owners with a shield of protection, mitigating their level of liability. As a business owner, you’re constantly up against potential threats of losing your personal assets; by establishing an LLC, you’re personal assets are safeguarded against those threats.
The great thing about LLCs is that they can be owned and registered from almost anywhere. Typically business owners feel more comfortable registering their LLC in the same state that they’re going to be conducting business in. It’s perfectly understandable to want that because it cuts down confusion in having to learn two separate sets of tax laws, adding further confusion to the situation. But when it comes to the protections that LLC’s give business owners, certain states have better assets protection benefits than other states, just like other states have better tax laws than other states.
To Register in Florida or to Register in Montana… That is the Question
Both Florida and Montana are great states to form an LLC in, especially from a tax perspective. In Florida, there’s no individual income tax; the corporate tax rate is actually really low and it’s a flat tax rate at that; and because of the various tax deductions the state has, businesses all over Florida (nearly half) don’t even have to pay taxes at all.
Now, Montana can also hold its own in the tax game as well. Similar to Florida, Montana also has a flat corporate income tax rate and low property taxes. Because both states have pretty good tax climates, that’s not going to help you make the decision on where you should register. Sure, in Montana, entrepreneurs will have to prepare for tax day and Floridian entrepreneurs in certain areas may not have to but taxes aren’t what you’re needing to compare. The next thing you’re going to have to compare is asset protection, and asset protection is a must among entrepreneurs.
When trying to make this decision, the state that has the better asset protection benefits is what’s going to help you make the best and most informed decision. Why? Because paying taxes is something that comes with being a business owner… you can’t avoid it (in most cases) but when it comes to protecting your personal assets, that trumps taxes on any day.
Asset Protection in Florida vs Montana
Again, just because you’re going through the process to own a Florida LLC, that doesn’t mean that it has to be registered there. You can own a Florida LLC and enjoy the protection benefits of a Montana LLC.
The protection benefits of a Florida LLC are pretty standard… it protects your personal assets from transactions of the business that cause any losses or debts owed to creditors; in short, a creditor cannot seek payment by coming after your personal assets like luxury cars or certain investments. With a Montana LLC, the protection benefits are a little bit different. You receive the standard benefits of an LLC plus some added benefits as well.
Montana LLCs Protect Your Personal Information
Who would have known that an LLC can go beyond protecting your personal assets and protect you as well? Well, not all LLCs do that but Montana LLCs provide that added protection of privacy of your personal information. This something that could potentially save you and your business from lawsuits, and it’s especially important for high net worth business owners.
According to Forbes, CEO fraud is on the rise. The article reports that from 1998 to 2007 there were 347 fraudulent companies utilizing several different fraud techniques. To prevent that from happening to your business, registering through a Montana LLC will help reduce your risk.
Montana LLCs Protect Your From Asset Searches
This is another added perk of a Montana LLC. It’s common knowledge that when you make major purchases, you’re going to be subjected to a credit check… that’s pretty standard, but what lots of people don’t know is that in having their credit checked, they’re also agreeing to an asset check. If you have assets that you don’t own outright, the fact that your Montana LLC is acting as the owner of your assets, you can be protected from possible consequences of those asset searches.