Florida Business Law

Florida Business Formation Lawyer for Tampa, Clearwater, St. Petersburg, Sarasota, Brandon, Bradenton, Orlando,

The most fundamental aspect of Asset Protection is the separation of personal assets from business potential liabilities. Choice of your Florida Business Entity is one of the most important decisions to make.

Florida Business Formation is an important decision impacting asset protection, owner liability, tax implications and more. The decision to form an entity for operating a Tampa or Florida based business is one that should be carefully examined with an attorney and an accountant. The most common types of Florida Businesses are the Florida LLC or Limited Liability Company, and the Corporation whether they are C Corporations or S Corporations. Our Tampa Florida Business Lawyers can help you choose the correct type of business entity. Of the types of entities one may choose, include:

Florida Sole Proprietorship
Florida General Partnership
Florida Limited Partnership
Florida Limited Liability Partnership (LLP)
Florida Limited Liability Limited Partnerships (LLLP)
Florida Family Limited Partnership
Florida Subchapter C-Corporation
Florida Subchapter S-Corporation
Florida Limited Liability Company (LLC)

Under the Professional Service Corporation and Limited Liability Company Act of Florida (the PSCLLC Act), professionals can also choose one of the above entities or they may choose to be an entity unique to professionals (doctors, lawyers, accountants, engineers, architects) :

Professional Association (PA)
Professional Limited Liability Company (PLLC or PL)

***Physicians and other professionals are best advised to seek the counsel of an experienced Asset Protection attorney when considering the Florida Business Entity choice.

While it is important to utilize an experienced Florida Asset Protection and Florida Business Attorney to form your entity, clients are cautioned against going with the “bare bones” via the Florida Secretary of State website at www.sunbiz.org or using a “corporation in a box” from a local office supply store, an online company or even an uninformed accountant or attorney

Many clients are better deserved and should benefit from the aspects of a personal review of their personal and business goals. Many clients could benefit from a well crafted buy out plan to protect their assets.

After careful consideration of your entity choice is completed, necessary steps must be taken to fulfill the requirements of each entity for planning, structure and relationships. An agreement must be created to carefully craft the relationship between the members, managers, partners, and shareholders. Without an agreement, the Florida Statutes will try to supply default provisions, but these provisions will not be custom tailored to the needs of the important parties.

THE SOLE PROPRIETORSHIP

The Florida Sole Proprietorship is the simplest and most dangerous (in terms of personal asset exposure) form of business in Florida. Any person conducting business in Florida without formally another entity structure is operating a Florida Sole Proprietorship.  No formal filing with the state is required to form this entity. As such, only a business and/or city occupational license is required to begin. The business owner is the individual and they are personally liable for the business debts including all liabilities and taxes. There is no separation of the individual’s personal assets from those of the business and all are at risk of loss. As for tax implications, the profits and losses of the sole proprietorship “pass through” to the individual.  The owner pays income tax on the profits of the business at the end of the year on their personal tax return.

FLORIDA PARTNERSHIPS

A Florida General Partnership is a business entity that is similar to a Florida Sole Proprietorship but with two or more owners.  This form of business is just as or more dangerous as a Florida Sole Proprietorship, because not only are the owners liable for their own liabilities but each owner can bind each-other to transactions.  The owners also share the profits and losses on a “pass through” basis.  Like the Florida Sole Proprietorship, the profits and losses of the business are considered that of the owners. Each partner reports their percentage of profit or loss of the business activity on their personal tax returns to the IRS.

A Florida Limited Partnership is a business entity with two or more owners who can be two types of partners. The partners can be Limited Partners or General Partners, but there must be at least two parters – one of each. The general partners are personally liable for all the debts and liabilities of the partnership.  To be eligible for limited partnership status, the partner cannot participate in the active management of the partnership. Limited partners must be careful to not participate in the control of the business, because if they do the shield against liability may be “pierced” and the partner may loose their personal protection. This business entity requires a certificate of limited partnership to be filed with the state of Florida.

Florida Subchapter S-Corporation (“S-Corp”) is generally more complex and structured than the typical Florida partnership, but does not have to be as complex as a C-Corp.  First, a C-Corp is formed and then within 120 days of formation may elect to be treated as a S-Corporation. This election allows for the profits and losses of the company to “pass through” to the shareholders. As a result, the entity is not taxed and there is only one level of taxation, as opposed to “double taxation” commonly talked about with the C-Corporation. These tax advantages require compliance with many regulations that limit certain aspects of an S-Corporation and could automatically disqualify your entity if not strictly adhered to.  There are other limitations and these should be considered when making the choice to become an S-Corporation in Florida.

The structure of a Florida S-Corporation can be quite complex.  The owners of a Florida S-Corporation are called shareholders who own stock in the company. The amount of stock represents their respective interests in the entity. In a Florida Corporation, the shareholders elect representatives to manage their interest. The representatives of the shareholders are called Directors and collectively make up what is known as the Board of Directors. The Board of Directors elects the officers of the company to run the day-to-day operations and report back to the directors.

There are some slightly cumbersome formalities associated with any Corporation that must be strictly adhered to and may not be necessary for certain entities.  It is best to seek the advice of competent and experienced counsel with regard to choosing this entity.

C-Corporations

The main differences between an S-Corporation in Florida and a Florida C-Corp are in the regulations, restrictions and how the entity is taxed. A Florida C-Corp is taxed as a business entity and the individual owners are also taxed on any distributions of the profits that they receive, thus resulting in a “double taxation”. This double taxation creates additional costs and reduces the profitability of an investment by a shareholder.

FLORIDA LLC

The Florida Limited Liability is a combination type entity taking the best aspects of the partnership and corporation, and lets you elect how to be treated with respect to taxing and liability. As a result, the Florida Limited Liability Company is becoming the most widely used and versatile business entity. There are limited situations when an LLC may not represent the best choice of entity. A careful discussion of your circumstances with a Florida Business Lawyer and Accountant is necessary.

Individual Assets can remain exposed to liability if careful steps are not taken during the proper setup and selection of the managers, members, and a carefully tailored LLC Operating Agreement designed with your individual issues. This is precisely why a Florida Attorney specializing in Business Formation is necessary and a “Do It Yourself” approach is not suggested.  A Florida LLC, can also PROTECT YOUR BUSINESS FROM THE PERSONAL LIABILITY OF THE OWNERS.

There are important choices with the management and taxing of a Florida LLC that should be considered and discussed prior to the formation.

For assistance with forming your new Florida Business or if you need help with transforming your Florida Business into a new form of ownership and you are in Tampa, Clearwater, St. Petersburg, Bradenton, Orlando or anywhere else in Florida CONTACT our Florida Business Lawyers by email at info@piklawgroup.com or call us at 813-413-1300 to discuss your situation today.