Are you tired of worrying about the personal risks of your business?

Starting a business can be exciting, but it also comes with big responsibilities, especially when debts and obligations fall directly on you.

‍If something goes wrong, you could end up losing your personal assets—savings, property, and more. That’s a scary thought, and rightly so! But it doesn't have to be this way.

‍Creating an LLC in Puerto Rico might be the solution you've been looking for.

With an LLC, you can separate your personal finances from your business finances and protect yourself from unnecessary risks, all while keeping flexibility and tax benefits.

Learn how to create your own LLC and take your business to the next level, without putting your financial security at risk.

What Is an LLC in Puerto Rico?

An LLC, or "Limited Liability Company," is a type of business structure.

‍What does that mean?

It means that the business and you are not the same thing. If your business has debts or legal problems, you won’t have to pay with your personal money. It’s like a shield that protects you!

Example: Imagine you're a consultant and your company has a debt. With an LLC, that debt is not your personal problem; it belongs to the company only.

What Are the Benefits of an LLC in Puerto Rico?

1. Personal Protection: If the business fails, it doesn’t affect you personally.
2. Lower Taxes: You can pay fewer taxes if you choose to be a "pass-through entity."
3. Flexibility: You decide how to run the business.
4. Access to Credit: The LLC can take out loans in its own name.

Example: An influencer might want an LLC to separate their personal income from their brand's.

How Do You Create an LLC in Puerto Rico?

To create an LLC, you need to register it with the Puerto Rico Department of State and pay a $250 fee. This process can be done online.

What do you need?

• Company name.
• Address.
• Names of the owners (members).

Example: A record label starting in Puerto Rico might use this process to protect itself legally.

How Much Does It Cost to Maintain an LLC?

The cost of maintaining an LLC is $150 per year in Puerto Rico. This payment keeps the registration active and your LLC in good standing.

Example: If you have an online store, this would be an annual cost to consider for keeping your business safe and formal.

Who Owns an LLC?

The owners are called members. It can be just you or multiple partners. Each member has a share of the business, which can be equal or different.

Example: Two friends start a marketing agency. Each one owns 50% of the LLC, unless otherwise agreed.

How Does an LLC Work Internally?

The internal rules are written in a document called the Operating Agreement. It explains:

• Who makes decisions.
• How profits are divided.
• How members are added or removed.

Example: In a music publishing company, partners could define how revenues are split in the Operating Agreement.

How Are LLCs Taxed in Puerto Rico?

An LLC can be taxed in two possible ways:

1. Double Taxation: The company pays taxes, and the members also pay taxes.
2. Pass-Through Entity: Only the members pay taxes, which usually results in lower taxes.

Example: A consultant might choose the pass-through option to avoid paying more than necessary.

How Do You Close an LLC in Puerto Rico?

To close an LLC, you must:

1. Decide to close it (written agreement).
2. Pay all debts.
3. Cancel licenses.
4. Sell assets and distribute profits.
5. Register the dissolution with the Department of State.

Example: If your online store no longer has sales, you might decide to close it to avoid additional costs.

Is an LLC the Best Option for Me?

If you want to protect your personal assets and have a formal business, an LLC is a good option. But if you’re just starting and income is low, it might be better to operate as an individual.

Example: A music producer just starting out might prefer to work as a freelancer and wait to create an LLC until income is higher.

Use Flou to Create Your LLC in Puerto Rico in 3 Simple Steps:

1. Choose a Business Name: We will help you set it up correctly and check with the Puerto Rico Department of State to ensure the name you want is available.
2. Answer a Few Questions About Your Company: Tell us all about the business you want to form, and we’ll help ensure you have what you need to make your company official and comply with regulations.
3. Get Your LLC in 24 hours: Our average delivery time over the 5 years we have been in business is 24 business hours. It's that simple!

Interested? Let's chat!