Legal Question in Business Law in Florida

Before you decide on having any new "Holding vehicle" such as a new LLC, you should check with your accountant or tax advisor about the tax effect should you distribute all of the assets out of your current LLC's to yourselves as the principals. Any distributions upon dissolution or merger could result in a capital gain to both of you if the assets have gone up substantially since you put them into each of the LLC's. Note that if your old LLC was taxed with 2 + members as a PARTNERSHIP then there would most likely be no capital gave upon dissolution of appreciated assets.

Without dissolving your old LLC's, should they each become equal members holding at least 80% of the new units (S regulations) then there should be no gift tax payable upon your LLC's transferring title to your assets, licenses, etc ( if possible per any state license regulations) over to the new Holding LLC. Your old ones simply become the new LLC partners and or members but I believe your tax consultant will most likely tell you to maintain your new Holding LLC in the same tax election as you held your old ones.

Don't forget that Florida now gives little additional creditor protection to a single member LLC, and your old ones may not have any at this time, nor will they have any in the future even with the proposed March 2011 Bill pending before the state legislature should it pass this year. Therefore you had best have current effective a. Operating agreements, with Bankruptcy and phantom income protection terms therein b. and have at least another second member of each of your individual LLC members, be it a spouse, or perhaps a trusstee or custodian for your minor child if any, etc.

DO NOT USE PRE PRINTED NOR FORMS TO GO ONLINE AND DO YOUR OWN. You would be asking for serious problems in the future; there have been many occasions of which I have seen individuals with an Agreement calling for partnership taxation and their subsequent accountant or counsel has set them up as an S corporation completely contrary to the master document that controls the company; or perhaps a form prepared from California or Nevada using all California or Nevada law and statutes throughout and then the partners fail completely to protect themselves in Florida.

I would also use a separate document for your managment resolution and not combine it with your operating agreements; hence try to keep your ownership/partner matters separate from a third party manager, even if you as a member act as the manager! It makes for cleaner documentation, clearer salary and mangement fee structuring in the future; and delegates the duties among the managing partners much better.

I've submitted a paper workup of the S vs LLC on AVVO website should you care to look at it.

Hope this helps some.