In the State of Florida, there are three primary business entities that should be registered through the Florida Department of State, Division of Corporations: Partnerships, Limited Liability Companies, and Corporations. Metropolis Business Law Group can help you select which type of business organization would suit your company’s needs best.
There are several different types of partnerships under Flordia Law:
A General Partnership is the standard type of partnership business organization in Florida. In this type of organization, one or more individuals who are “general partners” that own and operate a business and are personally liable for all business and leagal liabilities. Either general partner may individually bind the business to agreements or liabilities. This type of organization may not be requried to file paperwork with the State of Florida, but should still be governed by a Partnership Agreement.
General Partnership Agreement
A Florida Limited Partnership is comprised of at least one “general partner” and one “limited partner.” A general partner functions much the same as a general partner in a General Partnership: they have the ability to manage and bind the company to agreements and liabilities in the course of business. Limited partners, however, gives up managerial control of their ownership interest and functions as an investor in the company. The benefit of this type of an arragement is that the limited partner will not be personally liable for business debts and judgments, though the general partner will remain personally liable.
This type of business organization must register and file paperwork with the State of Florida. Metropolis Business Law can help you register your business to be a Florida Limited Partnership today!
A Florida limited Liabilty Partnership is comprised of one or more partners that are called “limited liabilities partners.: These partners function as general partners of a business and have managerial control over the business and the authority to enter into contracts and incur liabilities on behalf of the company. However, each limited liability partner is shielded from any liability arising from any other limited liability partner’s malpractice suits or negligence suits. As such, this type of an organization is best sutied for professional companies such as law firms or doctors’ offices. This type of business organization must register with the State of Florida.
A Limited Liability – Limited Partnership is a hybrid between a limited partnership and a limited liability partnership. It is comprised of limited liability partners and limited partners. Limited Liability Partners may have managerial authority in the company, and the power to bind the company contractually, while still maintaining protection against the malpractice or negligence of other Limited Liability Partners. Limited Partners have an ownership interest in the company, but no managerial authority in the business, nor the authority to bind the business to contracts or obligations. Limited Partners are protected from personal liability against the company’s obligations and legal liabiltiies. This type of business organization must register with the State of Florida.
A Limited Liability Company is a business organization that is a hybrid between a corporation and a partnership. This type of organization is comprised of members who enjoy limited liability for the busniess’ debts and other legal obligations, similar to shareholders in a corporation. A Limited Liability Company, however, is not an individual entity for tax paying purposes, but rather a conduit through which the profits of the company move to the members of the LLC. There are two types of Limited Liabiltiy Companies: a traditional LLC and a PLLC. Read below for more.
With a Florida Limited Liability Company, a business owner can have the security of corporate liability protection for their personal assets from the liabilities of the business, and the advantages of the tax structure of partnerships and S corps. Additionally, the LLC business organziation offers significant flexibility in the management and organization of the company.
A Florida Professional Limited Liability Company is designed for the formation of a business that will offer professional services, including the following professionals:
Just as a standard LLC, the PLLC offers protection of the member’s personal assets against the liabilities of the business, with the exception of negligence or malpractice liabilities of the individual professionals operating in the business.
Corporations in the State of Florida come in several different types:
A Florida For Profit Corporation is a commonly used business structure in which the business is an individual legal entity, owned by a number stock holders. There is no limitation on the number of stockholders in the corporation. The stockholders enjoy protection against the creditors of the business, and their liability is usually limited only to the amount of their own investment in the corporation. This type of structure enjoys several advantages:
- Florida Corporations have an unlimited life span, and as such, the death of a (or all) shareholder(s) does not result in the termination of the company;
- Ownership transfers are more orderly done through the sale of stock;
- Changes in stock ownership does not affect the management of the business; and
- It is easier to raise capital for the company through the sale of stocks and bonds.
The downfalls of a corporation mostly revolve around the higher expenses to form the company, and additional rules and regulations (as well as formalities) that are required to keep the corporation in good standing.
A S Corporation is a corporation with a limited number of shareholders (75 in the state of Florida) functions similarly to a Limited Liability Company, and is a very popular business organization because it offers the same types of restrictions that bind a Closely Held Corporation, but avoid the taxation pitfalls of the traditional corporation structure. Specifically, the S Corporation allows the shareholders to have “pass-through” income, so as to avoid taxation on the business income at the corporate level and again at the personal level.
A Florida Close Corporation is similar to a For Profit Corporation, with a few exceptions. In the state of Florida, a closely held corporation is limited to a relatively small number of shareholders. These corporations also have different stock sales rules, including that the corporation’s directors must offer shares to existing shareholders before offering them to new shareholders.
A Florida Non-Proft Corporation is a business that is formed to provide some benefit to the public. The most significant difference between the For Profit Corporation and a Non-Profit Corporation is the treatment of the corporation’s profits. In a Non-Profit Corporation, any money remaining after the corporation has paid its bills gets put back into the business, as opposed to being distributed to the shareholders. Non-Profit corporations may also qualify for IRS Tax Ecempt status, depending upon the purpose and operation of the business. For more information, contact us today.