Achieving Your Goals for Business Formation and Incorporation
Types of Business Entities in Florida
- A sole proprietorship is an unincorporated entity with one owner who pays personal income tax on profits earned from the business. The owner is not exempt from the liabilities and debts of the company.
- A partnership is an arrangement between two or more owners to conduct business operations. Each party is “jointly and severally” liable for the debts and liabilities of the company, and the income and losses pass through to the partners.
- A limited liability company (LLC) is a hybrid business entity, combining the attributes of a sole proprietorship and partnership with a corporation. Members of an LLC bypass personal responsibility for debts and liabilities of the company. Profits and losses are filed on the personal tax returns of the owners. Florida law requires that articles of incorporation are filed with the state to establish the rights and obligations of each member.
- A corporation is a legal entity that shields the owners from the liabilities and debts of the company. Additionally, it allows a business to issue stock options, establish business credit, and obtain funding. It can be a not-for-profit corporation or a for-profit corporation. Articles of incorporation are filed with the state. The shareholders annually elect a board of directors to oversee the business plan. There are differences between S corporations and C corporations regarding tax implications, raising venture capital, and ownership restrictions.
Downer Law Can Help You Make the Right Choice
The decision to choose a legal structure for business formation is complicated. Key considerations are the size of the business, whether you plan on hiring employees, liability risks, tax consequences, and your goals for the company’s long-term growth. If you are a new business owner or just thinking about a business start-up, contact our legal team to discuss your vision for the future. If you already have a business structure that is not working for you, we can help you convert to one that better suits your needs.
As attorneys with extensive business experience, we guide our clients for the successful launch or expansion of a business in various industries. Let us analyze your business and find the structure that will give you the right balance of legal protections and benefits.
