Which Type of LLC Is Right for You?

A South Florida Guide for Entrepreneurs and Investors

If you’re forming an LLC—or reviewing the one you already have—understanding your options is critical. The right structure can protect your assets, reduce your tax burden, and support long-term growth.

At Polaris Tax & Accounting, we help South Florida business owners, professionals, and investors choose the right entity based on strategy. Here’s a breakdown of six core LLC types and when each might make sense.

1. Single-Member LLC for Rental Properties

Purpose: Asset Protection
Tax Form: Schedule E

This is the go-to LLC for real estate investors. If you own a rental property in Plantation, Boca Raton, or Fort Lauderdale, a single-member LLC can help isolate liability—protecting your personal assets if something goes wrong.

Florida Tip: Most lenders allow you to transfer mortgaged property into an LLC you fully own. This typically does not trigger the due-on-sale clause.

Equity Alert: If you have more than $200,000 in equity across multiple properties, consider using separate LLCs to reduce risk exposure.

2. Single-Member LLC for Side Businesses

Purpose: Business Legitimacy + Liability Protection
Tax Form: Schedule C

Whether you’re consulting, selling online, or launching a side hustle, a single-member LLC helps you separate your business income and expenses, gain legal protection, and build credibility with banks and clients.

Tip: Don’t combine rental properties and business activities in one LLC. Keep them separate for clearer accounting and proper liability protection.

3. LLC Taxed as an S Corporation

Purpose: Self-Employment Tax Savings
Tax Form: 1120S

If you’re earning more than $50,000 in net profit from your business, you may benefit from converting your LLC to an S Corporation for tax purposes.

Why it matters: You can pay yourself a reasonable salary (subject to employment taxes) and take the remaining profits as distributions—not subject to self-employment tax.

This structure is especially powerful for consultants, service-based businesses, and medical professionals.

4. Multi-Member LLC (Partnership)

Purpose: Co-Ownership & Flexibility
Tax Form: 1065

If you’re forming a business with a spouse, colleague, or investor, a multi-member LLC provides flexibility and protection for all parties involved.

Examples:

Two real estate investors co-owning property
A business venture between two partners with distinct roles
Spouses managing income-generating property together

Make sure your partnership agreement is clearly structured—especially when it comes to profit-sharing and decision-making.

5. Series LLC

Purpose: Streamlined Asset Separation (Not for All States)
Tax Form: Schedule E or 1065

This is one master LLC with “series” underneath it—each with its own assets and liability protection. Some investors use this model for managing multiple rental properties under one umbrella.

Note: Florida doesn’t currently recognize Series LLCs, but if you invest in states like Texas, Nevada, or Utah, it may be worth exploring.

6. IRA-Owned LLC

Self-directed IRA owners can form an LLC to gain direct control over alternative investments like real estate or private businesses. This structure offers speed and flexibility but must follow strict IRS guidelines.

7. PLLC (Professional LLC)

Licensed professionals (doctors, lawyers, architects, CPAs) are often required to form a PLLC instead of a standard LLC. Check with Florida’s licensing board to confirm whether your profession qualifies.

Helpful read: Virtual Accountant for Licensed Professionals

Ready to Form (or Fix) Your LLC?

Whether you’re starting fresh or need to restructure an existing entity, we can help you choose the best option based on your goals, industry, and tax strategy.

Polaris Tax & Accounting supports clients across Plantation, Tamarac, and all of South Florida with entity formation, S Corp conversions, and tax planning designed for long-term success.

📅 Schedule a consultation today

We’ll help you build your business on the right foundation.