You make a multitude of decisions when starting a business. Entrepreneurs may consider the company’s potential profitability, its location, and more. One decision that requires careful thought is choosing the right Florida business entity. The following questions may help you narrow your search, but an experienced Florida business lawyer can provide more detailed advice.
Do you want to minimize taxes?
Corporations pay tax on their profits and shareholders pay tax on the income received from the corporation. Many people refer to this as double taxation. Some businesses avoid this by forming as pass-through entities like:
- Sole proprietorships,
- Partnership, or
- Limited liability companies.
Also, corporations may elect to be taxed as S corporations to reduce the tax burden.
What type of business management best suits the type of Florida business entity you want to open?
Fiercely independent people may choose a Florida business entity that allows them to be the sole or at least primary decisionmaker. Partnership and corporations usually have more than one owner to share business operation responsibilities. Limited liability companies may operate with one owner or several. Sole proprietorships, of course, are owned and managed by one person.
Are you looking for an easy, less expensive way to form your business?
Corporations tend to incur the most filing fees and legal fees. In addition, operating a corporation is usually more expensive than other entities. Sole proprietorships are the easiest and least expensive to form, but owners must register any fictitious or “doing-business-as” names with the Florida Division of Corporations. Partnerships and limited liability companies typically file formation documents with the state, but operating costs vary widely.
Do you want to limit personal liability?
A sole proprietorship may be the Florida business entity that offers the least protection. An owner’s private assets are vulnerable to business debts and obligations. Most partnerships also expose the owners to business debts, with limited partnerships being the exception. Corporations and limited liability companies typically offer owners at least limited liability for the business entity’s actions.
The Florida Business Entity You Choose Makes a Difference
Business ownership is full of situations where the easy decision is not always the best. The future of your business may depend on the decisions you make at its inception.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed tm. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.