When starting a business in the state of Florida, the advice of an experienced attorney can be crucial for a number of different reasons.
The type of business that you form will have significant consequences later on. This can be related to factors such as financial debts and personal liability for lawsuits. The state of Florida provides an overview related to different types of corporations and partnerships through the division of corporations.
Corporations and partnerships under Florida law
If you choose to form a corporation, note that this entity will be treated independently from the people who started the business. The corporation can enter into its own agreements and has tax liability just like a person. Corporations generally shield owners from some level of liability, and forming an LLC or limited liability corporation is a common way to avoid personal liabilities. LLCs also do away with many corporate requirements, making them a more flexible way to conduct business in many situations.
A partnership generally means that multiple people are responsible for the business and all of its financial matters. They will usually be investors in the initial stages of business formation and operations. General partnerships can be created in Florida to divide ownership equally, and make each business partner equally responsible for all debts and other obligations that the business incurs. Sole partnerships allow one person to register a business name without incorporation. This essentially allows the business and the person to function as if they are the same entity. Limited partnerships also exist so that partners can determine their level of management rights and responsibilities.
Because the decision to create a corporation or partnership will follow the business and affect the owners in the future, it is crucial to consult with a specialist business lawyer before committing to one type of business structure. Unsettled debts and other financial issues such as contract disputes can create significant problems later if these obligations are not considered carefully.
Non-profit businesses and organizations
Some business owners may have a different set of goals and decide that filing for non-profit status is better for their company. The Florida statutes provide guidelines related to how this process works.
The first step is to draft Articles of Incorporation. These need to be sent to the state’s division of corporations upon completion.
Each corporation name needs to be new and cannot already exist in the state’s records. The person filing may need to take some time to decide on a name that will represent their organization, yet not be too generic. The name needs to be approved by the division of corporations, and it needs to have a word such as incorporated, corporation, or an abbreviated term for a corporation in the title. The person filing must also provide a street address that will be considered the principal place of business, while a separate mailing address with a post office box can also be provided in addition to the place of business.
A person needs to be designated as an agent to receive legal process for the business. This individual will be served with lawsuits and needs to be available for other serious matters related to litigation. They must have a real street address somewhere within the state of Florida.
Each non-profit organization needs to have a specific purpose in the filing documents. This can simply state the type of business that the organization is engaged in for most situations, however non-profits who want to become tax exempt need to fulfill additional requirements.
There are other steps to completing the application process for a non-profit organization that are more detailed. An experienced lawyer can give more thorough advice about completing all the steps correctly.
Note that the state issues a disclaimer that they cannot provide legal advice and other forms of help during this time, so it is essential to have an attorney review all relevant documentation and guide you through the process of creating your non-profit.
The possibility of lawsuits around the country
While a business is incorporated under the laws of one state, it is also possible that the business may be sued or have to be represented in court in other states around the country. This is especially true for businesses that engage in large volumes of business in another state. These kinds of lawsuits can be removed to federal court on diversity jurisdiction. Because there are different rules of procedure for federal courts, it is important to have a lawyer advise you about what to do if this should happen.
Get help from a business lawyer in the Orlando area
If you need assistance with starting a business or any other legal issues that may come up as you begin operations, there is help available. Contact the attorneys at Legal Counsel, P.A. for more information.