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Where to Incorporate Your Business: Florida LLC vs. Delaware LLC

Michele Eilertsen
,
VPM Staff
Last Updated
December 30, 2021

It’s the ultimate LLC showdown: Florida vs. Delaware. Both states have their advantages, but which one is the right choice for your business?

Traditionally, Delaware has been the more popular option when it comes to LLC formation. This is primarily due to its business-friendly laws and no sales tax. Nonetheless, thanks to low filing fees and no state income tax, Florida has proven itself to be a strong contender.

Here’s everything you’ll want to consider before deciding where to incorporate your remote business:

What do Florida and Delaware Have in Common for LLCs

When it comes to LLC formation, all states are not created equal. However, Florida and Delaware LLCs have more in common than you might think!

Both states offer similar benefits for remote businesses looking to incorporate in one of the two locations, including:

No minimum capital requirements

Neither state requires you to deposit a minimum amount of capital; this means you can get your business up and running in its early stages easier. This not only makes entrepreneurship more attainable, but also serves to encourage growth at all stages of business development.

Asset protection

In Florida, there are laws in place that prevent judgement creditors from seizing any LLC ownership interests. These include business-related assets, financial accounts, and real estate, so you can rest assured knowing that your possessions like your home will remain safe.

Delaware LLCs also make it easy to keep your assets protected. Here, the only way creditors can pursue an LLC member’s ownership (i.e. assets) is through a charging order. A charging order involves a long and complicated process that requires a creditor to file a personal lawsuit against an individual LLC member, request that the court issue a charging order, and present the order to the LLC.

Now that you know what a Delaware and Florida LLC have in common, let’s delve into the differences.

Why Choose a Delaware LLC

Delaware is a desirable state to form an LLC in, and for good reason. Here’s what you can expect when you incorporate your remote business in Delaware:

An extra layer of privacy protection

When you form an LLC, your name and designated business address will be used for a variety of purposes. It’ll be on websites, packaging, client communications, paperwork… the list goes on. However, if you choose your LLC location with intention (read more for the perfect pairing), you can prevent this information from getting into the wrong hands.

The state of Delaware provides LLC owners with exceptional privacy protection. Since you aren’t required to list member names and addresses in your filings, you can essentially run your business anonymously, if you wish to do so. You’ll never have to worry about unsolicited mail, or worse, angry customers showing up at your house demanding refunds or worse stalking you.

Want to take it a step further? Pair your Delaware LLC with a Delaware virtual mailbox (which gets you a US-based commercial business address) to cover all of your bases and ensure your privacy won’t be compromised in any way.

Business-friendly climate

One of the most notable benefits of incorporating your LLC in Delaware is their business-friendly court system. Delaware is home to the Court of Chancery, a reputable, non-trial court that focuses on commercial litigation and real estate matters. Judges who are assigned to this court are experienced in corporate law and small business legal matters. This is a huge benefit for small businesses because it means that any outcomes are decided based on past case law, versus public opinion (which is often clouded by emotions and biases).

No Sales Tax for Your Delaware LLC

The state of Delaware does not require you to pay sales tax (example you won’t have sales tax when purchasing inventory for your ecommerce store), you’ll be able to save more money than had you decided to incorporate in a state that does.

While these benefits may sound appealing, don’t be so quick to discount a Florida LLC; they come with some pretty desirable advantages of their own!

Why Choose a Florida LLC

With a Florida LLC, you can enjoy different benefits and it’ll depend on what you find more valuable. Let’s cover the benefits.

No State Income Tax

Florida LLCs have seen increased demand in recent years because of one major reason: there is no state income tax. This can save your business a large chunk of money in the long run, so it’s a huge benefit for you.

Here’s an example: You own a t-shirt business and expect to sell $50,000 worth of products this calendar year. As a LLC in Florida, you would not be expected to pay taxes on this amount.

Need a Florida business address to take advantage of no state income tax? Grab a VPM Florida virtual mailbox that can be used for your LLC.

Lower filing fees

The state of Florida has lower filing and maintenance fees compared to Delaware ($390 total). For just $125, you can have your LLC up and running in a single afternoon. The other costs you’ll be responsible for are ones associated with filing your annual fees with obtaining a registered agent.

Looking to save more money? Skip paying registered agent fees when you sign up for a VPM virtual mailbox – you’ll get a free registered agent with select mailbox plans!

Delaware vs. Florida LLCs: Which is Better?

Now that you’ve learned about the benefits of both Florida and Delaware LLCs, it’s time to make a decision for your remote business. Both options offer a wealth of advantages; both are superior in their own ways.

Ready to get your LLC formed in the state of your choosing? Here are all the steps you’ll need to take to get started. Best of luck!

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Michele is an experienced writer of 5 years. Her expertise is in creating content that helps small businesses solve big problems.
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