One of the most important decisions when forming your business is the corporate structure.
Here’s a look at some of your options in the state of Florida:
If the business is privately owned, in the USA it is a Sole Proprietorship. In the majority of cases this is a single person, who owns and leads the business. Simultaneously the Sole Proprietorship is the most common corporation structure. This type has some downsides. The owner is absolutely liable with his assets. He or she is liable for taxation and it is not easy to receive money for this type of business. He or she also has to apply for a business license.
The partners lead this business together and all of the partners are absolutely liable for accounts payable. The General Partnership has more administration effort and is more cost-intensive. Also for this type of business you have to apply for a business license.
The Limited Partnership consists at least of 2 people, a General and a Limited Partner. The Limited Partner has supervision, available and limited. He can’t be part of the management and acts as an investor. The Limited Partner leads and is liable for the business. A shareholder contract has to be prepared for the forming of the business. Furthermore you have to request a Certificate of Limited Partnership with the Secretary of State.
Limited Liability Company (LLC)
The Limited Liability Company is not accepted in all states but it is in Florida. The shareholders are personally liable for taxation and the accountability is limited to the business assets. For the forming of the business the filing documents have to be registered with the Secretary of State. At least two shareholders are required for a Limited Liability Company. Our accountant can inform you about tax benefits for other types of companies.
The most used type of business for forming a company in the USA is the corporation. By presenting the Articles of Corporation to the Secretary of State, you can carry out the forming of the corporation quickly. Forming the company in Florida, the registered office is also in Florida. The corporate structures are governed by the laws of the State of Florida. The Florida Corporation can carry out business in every state of the USA. All of the states require a registration. Foreign nationals can also form a Corporation in Florida. A registered agent (a person headquartered in Florida) has to be named to receive and deliver mail/documents.
Before you make a decision it is important to contact a tax consultant. We can connect you to our partners to make it easy for you to make the right decision.
This article doesn’t present any legal advice, but solely serves as general information.
Are you thinking about buying a business but have questions about the formation of your business entity? Would you like to know more about the pros and cons of the choices above? Ask us! Leave any questions or comments here and we would be happy to help.