The formation of a new entity can be a challenging endeavor in that it requires business owners to diligently look into their options and determine what makes sense for their financial future. At Stok Folk + Kon, our experienced commercial law lawyers have extensive knowledge of all aspects of this process and can help guide you through it in the Fort Lauderdale area. Our attorneys assist clients with legal and tax-planning advice from the very outset of forming their businesses. We help set up various types of entities, including incorporations, partnerships sole proprietorships, limited liability partnerships (LLPs), limited liability companies (LLCs), “S” corporations, and “C” corporations.General Partnerships
In Florida, there are several types of legally recognized partnerships. General partnerships are not required to register with the state or obtain a business license. However, they may elect to register to present themselves more professionally to prospective clients.
Each partner is individually responsible for any business-related activity that he or she engages in. Under Florida law, moreover, each of them is subject to “joint and several liability.” This means that every partner is fully accountable for any debts incurred by the partnership over the course of business, irrespective of his or her initial investment in or control over the entity. Since Florida does not have a filing requirement, the joint and several liability rule can apply to a person acting as a partner, even if there was no explicit agreement, through a doctrine known as “partnership by estoppel.” In other words, if you are behaving like a partner, you could be taking on the full responsibility for any debts owed by the entity to a third party.Limited Liability Companies
A limited liability company is a legal entity that has some elements of a corporation and others of a partnership. On one hand, the LLC provides its owners with protection against personal liability, just like a corporation. On the other hand, it is typically treated as a non-corporate business organization for tax purposes. Florida utilizes “pass-through taxation,” which means owners can report an LLC’s profits and losses on their individual tax return forms.
In order to create this entity, there are certain procedural requirements. These concern naming the business, creating the Articles of Organization, filing them with the Florida Division of Corporations, designating an agent for the service of process, and more. The LLC business model is appealing to business owners given its flexibility, less formal business requirements, and tax status.Corporations
A corporation is defined as a company or group of people authorized by law to act as a single person. These entities enjoy most of the rights that individuals have. Thus, a corporation can enter into contracts, loan money, borrow funds, sue, be sued, own property, and pay taxes. Perhaps the most appealing aspect of this business form is its limited liability. Thus, the shareholders are entitled to share in profits but are not on the hook for a company’s debts. In Florida, you can set up an “S” corporation or a “C” corporation.
Specific procedures for forming a corporation include:
- Choosing a corporate name;
- Preparing and filing a certificate of incorporation;
- Appointing a registered agent;
- Setting up a corporate record book;
- Preparing corporate bylaws;
- Complying with the relevant tax laws;
- Appointing initial corporate directors;
- Holding the first board of directors meeting;
- Issuing stock; and
- Preparing and filing the annual report.
Choosing to form the right type of entity can be vital to the financial future of your company. For this reason, you may benefit from having a skilled business law attorney to advise you about your options when you are taking this step near Fort Lauderdale. At Stok Folk + Kon, we will take the time to diligently review your needs and goals before making recommendations accordingly. We proudly represent clients in Hollywood and Fort Lauderdale, as well as other cities throughout Florida. To learn more about your rights and options, please call us today at (954) 237-1777 or contact us online to set up a consultation.