Owning a Professional LLC With a Non-licensed Spouse By Entireties
People holding professional licenses often want to operate their business through a Florida limited liability company for tax planning. Ownership of the professional LLC raises planning and regulatory issues in Florida.
Using an LLC taxed as a subchapter S corporation may reduce employment taxes and facilitate the deduction of ordinary and necessary business expenses. For asset protection purposes, conducting a business as an LLC makes it more difficult for a judgment creditor to attack the owner’s interest in his business.
Single owner businesses will not get asset protection benefits if the owning individual is the only member of the business LLC because creditors may foreclose upon the membership interest in a single member LLC. When the owner is married one solution is to have the business LLC owned by the owner and his spouse as tenants by entireties because entireties assets are protected from judgments against either spouse individually.
One of my clients is a licensed real estate broker who wanted to conduct his business through a Florida LLC. I suggested that he form an LLC owned with his non-licensed wife, but I told him that I was not sure the Florida real estate regulations permitted a licensed broker to own a brokerage company with a non-licensed spouse.
The client reported that the called the Department of Professional Regulation and that he spoke to several different people including their legal department. He says that different people at the DPR gave him different and conflicting answer. At last, he spoke with a supervisor who assured the client that he and his wife can own the real estate LLC jointly.
My general experience with different clients in other licensed professions including accountants, financial professionals, and medical clinics (but not attorneys) is that Florida permits a licensed business person to own his professional LLC or corporation by the entireties with the non-licensed spouse.
About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.
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