Choosing the Right Business Entity for your Florida Business
Written on November 13, 2018
When you are planning to start a new business in Florida, it is understandable to be eager to hire employees, open your doors, and get things going right away. However, a solid foundation is critical. You must lay the proper framework with a business entity type, which is one of the most important decisions you will make as a Florida business owner. You can rely on a Florida business formation attorney for advice and counsel, but an overview may be useful.
Important Factors to Consider
Choosing the right fit with a business structure depends on many variables, but there are certain considerations that help guide your decision. When discussing your options with a business lawyer, you should address:
- Personal Liability: Shielding your personal assets from the judgments, debts, and other liabilities of your company is among the top factors when looking at your business formation options. Without limited liability, any contract disputes or business litigation could put your home, autos, bank accounts, and other property in jeopardy.
- Tax Matters: Certain organizations are preferred for federal tax purposes, especially when considering a “flow-through” entity. Your election can have benefits for your personal income tax returns, but you must meet strict criteria to qualify.
- Business Licensing: Most businesses in Florida must apply for a business tax receipt at the local level, but the requirements vary by location. Plus, companies operating in certain industries must obtain occupation-specific licenses.
Business Entity Options Under Florida Law
After considering the above factors and your business objectives, you should review the specifics of each entity type available through the Florida Department of State, Division of Corporations. The most popular structures include:
- Sole Proprietorship: With this type of business organization, your company is an extension of you as an individual. You do not need to file paperwork to start your business, but you must file a fictitious name application if you operate your company under a name other than your own.
- Limited Liability Company (LLC): As the name suggests, this formation will protect your individual assets if your company incurs financial or legal liabilities. You have different options for how you want your LLC taxed, and there are fewer formalities as compared to corporations.
- Corporation: A corporation is an entity that is owned by shareholders, who elect directors and officers to handle the business of the company. You may consider a corporation if you intend to have many shareholders or want to take the entity public in the future, though you should discuss S- or C-corporation elections with your business formation lawyer.
A Florida Business Law Attorney Can Explain Your Options
If you have questions about choice of business structure and how to make a wise decision, please contact Clearwater Business Law at (727) 785-5100. Our lawyers can schedule a consultation to review your circumstances, learn more about your goals, and explain your options. We have decades of combined experience in business formation, litigation, contracts disputes, and related areas, and considerable knowledge of federal, state, and local laws. Our attorneys represent businesses and owners in Clearwater, St. Petersburg, Largo, and throughout Pinellas County, FL, and we look forward to serving your legal needs.