LLC vs. Inc: The 2026 Structure Guide for Sarasota Small Business Owners

If your New Year’s resolution involves starting a new venture in Sarasota or Manatee County, congratulations. Our region continues to grow, offering fantastic opportunities for entrepreneurs.

But before you print business cards or sign a lease, you face one of the most critical decisions in the life of your company: choosing your legal structure.

The alphabet soup of business acronyms, LLC, C-Corp, S-Corp, PA, can be overwhelming. Many new owners make this decision based solely on immediate tax concerns. While taxes are important, as a business formation attorney in Sarasota, I argue that two other factors are equally critical for your long-term peace of mind:

Liability Protection: Helping to protect your personal assets from business lawsuits.
Estate Succession Ease: How easily the business can continue (or be sold) if you pass away or become incapacitated.

Here is a guide to help you navigate the choice between the two most common structures: The Limited Liability Company (LLC) and the Corporation (Inc.).

The Common Ground: Why You Need “Asset Protection for Your Florida Business”

Before comparing them, let’s establish what they share. Both LLCs and Corporations are distinct legal entities separate from their owners.

If you operate as a “Sole Proprietorship” (just doing business under your own name without registering an entity), there is no legal barrier between you and the business. If someone slips in your shop or sues you for a breach of contract, they can come after your personal house, car, and bank accounts.

Both an LLC and a Corporation provide the “corporate veil.” If properly maintained, this veil limits your liability to the assets within the company, helping to protect your personal nest egg. For this reason alone, operating as a sole proprietorship in 2026 is rarely recommended.

All Florida entities must be properly registered and maintained annually with the Florida Division of Corporations (Sunbiz) to keep this protection active.

The Deep Dive: LLC Estate Planning Advantages

For many Sarasota small business owners, especially sole owners, husband-and-wife teams, or family businesses, the LLC is often the preferred structure right now. Why? It often comes down to the Operating Agreement.

The Operating Agreement is the private rulebook for your LLC. It is not filed with Sunbiz; it is an internal contract between members. Because the law allows great flexibility in what you put in this agreement, it is a powerful tool for LLC estate planning.

Avoiding Probate: You can structure your LLC interests so they transfer automatically upon death (similar to a “payable on death” designation on a bank account), bypassing the lengthy Florida probate process.
Assigning to a Trust: It is relatively simple to assign your membership interest into your Revocable Living Trust, allowing for seamless management by your successor trustee if you become incapacitated.
Control vs. Value: You can structure an LLC to give economic benefits to your children while retaining management control for yourself during your lifetime.

The Deep Dive: When Corporation is the Right Choice

If the LLC is so flexible, why do Corporations exist? They offer structure that outside investors prefer.

If your 2026 business plan involves seeking significant venture capital funding in the next few years, or if you plan to issue stock options to dozens of employees, investors often prefer the rigid, predictable structure of a Delaware or Florida Corporation (Inc.).

However, for estate purposes, corporate stock is generally a probate asset. If you own shares of an “Inc.” in your individual name when you die, your family will likely need to open a probate administration to transfer those shares.

Don’t Just “DIY” Your Future

It is tempting to go online in January and click a few buttons to form your entity. But choosing the wrong structure, or worse, choosing the right structure but failing to draft a proper Operating Agreement or Corporate Bylaws, can lead to expensive litigation and headaches for your family down the road.

Your business is likely one of your most valuable assets. Let us help you build it on a solid legal foundation for 2026 and beyond.

Legal Disclaimer The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience.

This blog post is for general informational purposes only and does not constitute legal advice. Reading this article or contacting our office does not create an attorney-client relationship. Every legal situation is unique; you should consult with a qualified attorney regarding your individual circumstances. Nothing in this article should be considered tax advice. Our office does not provide tax advice, and you should consult with a qualified tax professional before taking any action that may have tax consequences.