Some Florida entrepreneurs decide that forming a limited liability company is the best way to go. They want a business structure that is simple to create while shielding their personal assets from liabilities and also avoiding double taxation. Additionally, LLCs come in different forms. You may create one for a limited time for a specific function.
Chron describes how special-purpose LLCs differ from other LLCs and how they may benefit entrepreneurs who have specific projects in mind.
Forming an LLC for a project
While many people form LLCs to create an ongoing business, a special purpose LLC only needs to exist to create and manage a specific project. Once the project is complete, the owners of the LLC will dissolve the business.
There are a number of projects suited to a special purpose LLC. You may want to use one to oversee the construction of a piece of real estate like a commercial building. If you run a film production company, you might join with one or more film companies to form an LLC to produce a single motion picture.
Using money for a specific priority
A major factor in forming a business is whether or not the business will be profitable in the long term. This may involve a lot of planning, budgeting and profit forecasting to make sure your investment is worth it.
However, if you only have a single project in mind, you are only concerned about the viability of the project. It may also be easier to raise capital if you know people who have no desire to go into business but do possess an interest in the project you want to finance.
Consider your priorities
The prospect of a short-term project that may yield a big profit could make a special project LLC attractive to you. Still, it is important to consider your priorities. You may desire a long-term enterprise, which could make a more permanent LLC or a corporation more fitting for your goals.