The Law Office of Sofia Guzman, P.A. assists individuals, entrepreneurs, and businesses with the formation of various business and corporate entities. We gain an understanding of your goals and concerns and we inform you of the advantages of your legal options. We can help you create a solid business structure so that you can provide your organization with the best possible chance of success. Whether you are interested in forming a limited liability company (LLC), S corporation, C corporation, joint venture, or partnership, we can help you.
Corporate and Business Entities
There are four primary types of legal structures, including corporations, LLCs, sole proprietorships, and partnerships. Each can have distinct advantages for various circumstances and situations.
Corporations are separate legal entities with rights and liabilities distinct from employees and shareholders. The two types of corporations are known as C corporations and S corporations.
C corporations are most often large companies with many shareholders. Often, they are also publicly traded. Profits earned by C corporations are taxed twice, meaning that both the corporation and individual shareholder pay income taxes.
S Corporations are typically privately held and smaller than C corporations. Profits of S corporations are taxed only as distributions to shareholders. The Internal Revenue Service (IRS) requires S corporations to satisfy certain requirements, including a limited number of shareholders, in order to obtain this tax status.
Limited Liability Company (LLC)
LLCs provide flexibility by blending aspects of partnership and corporate structures. A hybrid business, an LLC offers the benefits of corporate liability protection and the availability of the pass-through income taxation characteristic to partnerships. The state of Florida allows LLCs to elect whether to be taxed as corporations or partnerships.
A sole proprietorship is an individually owned and operated business in which the owner is the only owner and decision maker for the business. The business must be for-profit and it is not a separate entity from the owner. Sole proprietorships are not required to file Florida corporate income tax returns. Instead, profits are taxed at the owner’s individual federal tax rate. Sole proprietorship can subject owners to unlimited personal liability to any debts or obligations the business incurs. However, in Florida, liability is limited by the Florida’s homestead rights laws that prevent creditors from taking the home of a sole proprietorship’s owner. Sole proprietorships are relatively easy and inexpensive to form. There is rarely any paperwork to file with state or local governments, but a business operating license or permit may be required. If the business owner wants to operate the business under a name other than their own, they must locally file for an assumed or fictitious name, commonly expressed with the phrase “d/b/a” meaning “doing business as.”
Partnerships are unincorporated businesses in which two or more people share liability as co-owners of a for-profit business and provide capital. Although partnerships can be formed easily, there are stipulations for their dissolution. Thorough planning and partnership agreements are essential. In a general partnership, co-owners share management and operational control as well as profit and losses equally, unless stated otherwise in a partnership agreement. A general partnership cannot be an investment or real estate venture. Like a sole proprietorship, taxation occurs at the personal level; therefore each partner is taxed on their income tax return according to their ownership percentage and the amount of income they receive. This form of taxation is often advantageous to owners because they are not “double taxed.” However, partnerships as an entity must also file tax returns for informational purposes. Co-owners of a general partnership are subject to unlimited personal liability, meaning that partners are responsible for the business’s debts.
Starting a business in Florida requires completion of articles of incorporation, filing with the state, payment of incorporation fees, and acceptance by the Florida Secretary of State. Whatever your case may entail, we strive to reduce liabilities, preserve assets, and construct the foundation of your vision for success. We can anticipate all repercussions, work diligently to protect your interests, and provide you with detailed information.