Tampa & St. Petersburg Business Formation Attorney
When you are considering a new business venture, it is important to makes sure that you choose the right kind of business form to support your business needs. In Florida, there are three main legal business structures to choose from depending on the needs and size of your company. There are advantages and disadvantages to each business structure, as well as important tax and legal liability considerations. Our experienced Tampa business formation attorneys can advise and guide you in selecting the appropriate choice for you.
A Corporation is a business entity that is legally recognized as a separate identity from its owners, shareholders, or managers. The shareholders in corporations are also generally not liable for the corporation’s debts or obligations. In Florida, a corporation can be formed as a “for-profit” or a “not-for-profit” corporation.
The first steps in forming a corporation in Florida are choosing a unique corporate name and filing of Articles of Incorporation with the Florida Department of State, Division of Corporations. The Articles of Incorporation is a document that details, among other things, the corporation’s name and address, corporate purpose, the name of a registered agent for purposes of service of process. Although not required, a corporation should also develop and adopt by-laws for the internal governance of the corporation.
For purposes of filing taxes as well as conducting other business, a corporation should obtain a Federal Employer Identification Number (FEIN) from the Internal Revenue Service. This number is similar to a social security number for a person. Due to the fact that a corporation is a separate entity, profits made by a corporation become subject to double taxation, once at the corporate level and again at the shareholder level once distributed. For a corporation seeking to avoid this double taxation, they can consider using an S-Corp formation.
Limited Liability Company
A limited liability company (LLC) is a business entity that has similarities with both a corporation and with a partnership. The main legal advantage of a LLC is the fact that, like a corporation, the owners of the company are generally not personally liable for the company’s debts or obligations.
Florida law allows for both single member and multimember LLCs. Members may join an LLC before formation or after formation depending on the agreement of the members, and a member need not have a financial interest in the LLC to be a member.
Federal and Florida law does not treat an LLC as a separate entity for tax purposes however, and the income made is reported on the owner’s income taxes. There are some important tax disadvantages to keep in mind when thinking of forming a LLC in Florida. In some cases, a business owner who forms a LLC may be required to pay Social Security and Medicare taxes on any salary or profits drawn from the business. Contact our Tampa LLC and business formation attorneys for more information.
A partnership is formed when two or more people agree, either in writing or verbally, to conduct business together for profit. A business may be formed as a general partnership or a limited partnership. The business name can be the names of the partners within the partnership, should the partners choose a different name, it must seek permission from the state to use a fictitious name.
Taxation for a partnership is similar to that of the LLC with partners taxed individually. In terms of liability, general partners may be held liable for the debts and obligations of the business, but in most cases, limited partners are not. Should a business seek liability protection for a general partner, they may form the business as a limited liability limited partnership. Both limited partnerships and limited liability limited partnerships must file a Certificate of Limited Liability with the Florida Department of State.
Contact a Tampa Business Formation Attorney
If you are looking to conduct business in Florida, either as a new entity or as a foreign business, choosing the right business entity for your business is the first step to success. Contact the Tampa business attorneys of Saady & Saxe, P.A. for a consultation today.