A General Overview
<ul><li>This information is presented in a general format for the benefit of all.  As such, it should not be taken as lega...
<ul><li>PROFESSIONAL EXPERIENCE </li></ul><ul><ul><li>Law Firm Experience </li></ul></ul><ul><ul><ul><li>Work in Coral Gab...
<ul><li>Sole Proprietorship </li></ul><ul><li>General Partnership </li></ul><ul><li>Corporations </li></ul><ul><ul><li>C-C...
<ul><li>Liabilities of the owners </li></ul><ul><li>Tax implications </li></ul><ul><li>Control within the company </li></u...
<ul><li>General Company Attributes </li></ul><ul><ul><li>There is a single owner of the business </li></ul></ul><ul><ul><l...
<ul><li>Reasons to use a sole proprietorship: </li></ul><ul><ul><li>Small operation with limited liabilities </li></ul></u...
<ul><li>Disadvantages of a sole proprietorship: </li></ul><ul><ul><li>Liabilities of the business affect the assets of the...
<ul><li>General Company Attributes: </li></ul><ul><ul><li>Two or more individuals doing business together </li></ul></ul><...
<ul><li>Reasons to use a general partnership: </li></ul><ul><ul><li>Smaller operation with several owners </li></ul></ul><...
<ul><li>Disadvantages of a general partnership: </li></ul><ul><ul><li>Liabilities of business affects the personal assets ...
<ul><li>General Comparison of a C- Corporation and an S- Corporation: </li></ul><ul><ul><li>The main distinction between a...
<ul><li>General description of a C- Corporation: </li></ul><ul><ul><li>A corporation is made up of shareholders whose owne...
<ul><li>General description of a C- Corporation: </li></ul><ul><ul><li>Must maintain corporate books by documenting annual...
<ul><li>Benefits of using a C- Corporation: </li></ul><ul><ul><li>Liability protection </li></ul></ul><ul><ul><ul><li>Asse...
<ul><li>Disadvantages of using a C- Corporation: </li></ul><ul><ul><li>Double taxation </li></ul></ul><ul><ul><li>Maintain...
<ul><li>General description of an S- Corporation: </li></ul><ul><ul><li>Corporate governance and structure is same as a C-...
<ul><li>Benefits to using an S- Corporation: </li></ul><ul><ul><li>Liability protection </li></ul></ul><ul><ul><li>Pass th...
<ul><li>Disadvantages to an S- Corporation: </li></ul><ul><ul><li>Complexity </li></ul></ul><ul><ul><li>Upon formation of ...
<ul><li>Tax Comparison between S- and C- Corporations: </li></ul><ul><ul><li>Example: Bob’s Tax Services, Inc </li></ul></...
<ul><li>Professional Corporations generally: </li></ul><ul><ul><li>Professionals such as doctors, real estate agents, lawy...
<ul><li>General description of an LLC: </li></ul><ul><ul><li>Historical background </li></ul></ul><ul><ul><ul><li>Florida ...
<ul><li>General description of an LLC: </li></ul><ul><ul><li>Company management and organization is defined in the LLC Ope...
<ul><li>Benefits of an LLC: </li></ul><ul><ul><li>Liability protection for the members </li></ul></ul><ul><ul><li>Flexibil...
<ul><li>Disadvantages of an LLC: </li></ul><ul><ul><li>Still have to maintain company books and deal with a more formal st...
<ul><li>Florida LLC vs. Florida Corporation: </li></ul><ul><ul><li>Tax issues </li></ul></ul><ul><ul><li>Liability protect...
<ul><li>General overview: </li></ul><ul><ul><li>More complex and specialized </li></ul></ul><ul><ul><li>Include: </li></ul...
<ul><li>Increasing popularity in using LLC’s for property holdings </li></ul><ul><li>Also can use </li></ul><ul><ul><li>Va...
<ul><li>General Concerns: </li></ul><ul><ul><li>Where will you primarily be operating? </li></ul></ul><ul><ul><li>What oth...
<ul><li>General issues: </li></ul><ul><li>Questions? </li></ul><ul><ul><li>For any individual questions, feel free to set ...
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Florida Business Entities

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Transcript of "Florida Business Entities"

  1. 1. A General Overview
  2. 2. <ul><li>This information is presented in a general format for the benefit of all. As such, it should not be taken as legal advice regarding a specific situation you may be involved in. Each company is unique and an specific questions should be dealt with by consulting with an attorney. </li></ul>Presented by the Robert Rogers Law Firm, PA
  3. 3. <ul><li>PROFESSIONAL EXPERIENCE </li></ul><ul><ul><li>Law Firm Experience </li></ul></ul><ul><ul><ul><li>Work in Coral Gables law firm in corporate formations </li></ul></ul></ul><ul><ul><ul><li>Work in Orlando law firm in insurance litigation </li></ul></ul></ul><ul><ul><ul><li>Clerkships with Maryland State’s Attorney’s Office, Southern Minnesota Regional Legal Services and Private Corporation </li></ul></ul></ul><ul><ul><li>Present Practice Areas </li></ul></ul><ul><ul><ul><li>Corporate, Transactional, Small Business, Company Formation, Agreements, International Transactions, Non-Profit Assistance, Estate Planning </li></ul></ul></ul><ul><li>EDUCATION </li></ul><ul><ul><li>University of Minnesota Law School </li></ul></ul><ul><ul><ul><li>Juris Doctor. </li></ul></ul></ul><ul><ul><ul><li>Participant in the Spring 2006 study abroad program at the ESADE University in Barcelona, Spain. </li></ul></ul></ul><ul><ul><ul><li>Related coursework: Commercial Litigation & Arbitration, Corporations, Adv. Corporations, Legal Research Seminars. </li></ul></ul></ul><ul><ul><li>Brigham Young University </li></ul></ul><ul><ul><ul><li>Major: B.A. International Studies: Law and Diplomacy Emphasis Minor: Latin American Studies </li></ul></ul></ul>Presented by the Robert Rogers Law Firm, PA
  4. 4. <ul><li>Sole Proprietorship </li></ul><ul><li>General Partnership </li></ul><ul><li>Corporations </li></ul><ul><ul><li>C-Corporation </li></ul></ul><ul><ul><li>S-Corporation </li></ul></ul><ul><ul><li>Professional Corporations </li></ul></ul><ul><li>Limited Liability Company </li></ul><ul><li>“ Specialty” Entities </li></ul>Presented by the Robert Rogers Law Firm, PA
  5. 5. <ul><li>Liabilities of the owners </li></ul><ul><li>Tax implications </li></ul><ul><li>Control within the company </li></ul><ul><li>Profit sharing </li></ul><ul><li>Administration </li></ul>Presented by the Robert Rogers Law Firm, PA
  6. 6. <ul><li>General Company Attributes </li></ul><ul><ul><li>There is a single owner of the business </li></ul></ul><ul><ul><li>Taxes from the business are reported directly on the individual’s tax return </li></ul></ul><ul><ul><li>Generally no filing with the state, unless using a fictitious name/DBA </li></ul></ul><ul><ul><li>No real formal structure </li></ul></ul><ul><ul><li>Assets/liabilities of the business are intertwined with personal assets/liabilities </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  7. 7. <ul><li>Reasons to use a sole proprietorship: </li></ul><ul><ul><li>Small operation with limited liabilities </li></ul></ul><ul><ul><li>Less administration </li></ul></ul><ul><ul><li>Individual control of the business </li></ul></ul><ul><ul><li>Pass-through taxation </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  8. 8. <ul><li>Disadvantages of a sole proprietorship: </li></ul><ul><ul><li>Liabilities of the business affect the assets of the owner </li></ul></ul><ul><ul><li>Less formal structure can appear less professional </li></ul></ul><ul><ul><li>Funds for the business come solely from the individual owner </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  9. 9. <ul><li>General Company Attributes: </li></ul><ul><ul><li>Two or more individuals doing business together </li></ul></ul><ul><ul><li>Normally operating under a partnership agreement </li></ul></ul><ul><ul><li>Pass-through tax structure </li></ul></ul><ul><ul><li>Similar to a sole proprietorship, no filings with the state unless using a fictitious name/DBA </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  10. 10. <ul><li>Reasons to use a general partnership: </li></ul><ul><ul><li>Smaller operation with several owners </li></ul></ul><ul><ul><li>Allows for more owners than the sole proprietorship </li></ul></ul><ul><ul><li>Structure is still relatively simple </li></ul></ul><ul><ul><li>Flexibility in form when using a partnership agreement </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  11. 11. <ul><li>Disadvantages of a general partnership: </li></ul><ul><ul><li>Liabilities of business affects the personal assets of the owners </li></ul></ul><ul><ul><li>Owners can be liable for the actions of other partners </li></ul></ul><ul><ul><li>Problematic without agreement </li></ul></ul><ul><ul><ul><li>Decision-making </li></ul></ul></ul><ul><ul><ul><li>Profit-sharing </li></ul></ul></ul>Presented by the Robert Rogers Law Firm, PA
  12. 12. <ul><li>General Comparison of a C- Corporation and an S- Corporation: </li></ul><ul><ul><li>The main distinction between a C- Corporation and an S- Corporation is how they are taxed and who can be a shareholder/owner of the corporation </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  13. 13. <ul><li>General description of a C- Corporation: </li></ul><ul><ul><li>A corporation is made up of shareholders whose ownership within the company is based on the number of shares that they own </li></ul></ul><ul><ul><li>Anyone can own shares within a C- Corporation </li></ul></ul><ul><ul><li>Governed by a Board of Directors who are elected by the shareholders </li></ul></ul><ul><ul><li>Articles of Incorporation must be filed with the state with a filing fee of $70.00. </li></ul></ul><ul><ul><li>An annual report must be submitted to the Secretary of State, Division of Corporations with a fee of $150.00. </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  14. 14. <ul><li>General description of a C- Corporation: </li></ul><ul><ul><li>Must maintain corporate books by documenting annual shareholder meetings </li></ul></ul><ul><ul><li>Corporate governance is outlined in the corporate bylaws </li></ul></ul><ul><ul><li>Both corporation and shareholders are taxed on income received </li></ul></ul><ul><ul><li>Profits and shareholder control are divided by the number of shares owned </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  15. 15. <ul><li>Benefits of using a C- Corporation: </li></ul><ul><ul><li>Liability protection </li></ul></ul><ul><ul><ul><li>Assets of shareholders are separated from the liabilities of the business </li></ul></ul></ul><ul><ul><li>Flexibility regarding who can invest </li></ul></ul><ul><ul><li>Company image/Marketing </li></ul></ul><ul><ul><li>Professionalism associated with formal structure </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  16. 16. <ul><li>Disadvantages of using a C- Corporation: </li></ul><ul><ul><li>Double taxation </li></ul></ul><ul><ul><li>Maintaining corporate books </li></ul></ul><ul><ul><ul><li>Can affect liability protection for owners </li></ul></ul></ul><ul><ul><li>Restrictions on stock offerings </li></ul></ul><ul><ul><li>More complex decision making process as number of shareholders increases </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  17. 17. <ul><li>General description of an S- Corporation: </li></ul><ul><ul><li>Corporate governance and structure is same as a C- Corporation </li></ul></ul><ul><ul><li>Ownership within an S- Corporation is limited to no more than 75 shareholders and all shareholders must have social security numbers </li></ul></ul><ul><ul><ul><li>There also is the possibility of having a S- Subsidiary that is wholly-owned by another S- Corporation </li></ul></ul></ul>Presented by the Robert Rogers Law Firm, PA
  18. 18. <ul><li>Benefits to using an S- Corporation: </li></ul><ul><ul><li>Liability protection </li></ul></ul><ul><ul><li>Pass through tax structure </li></ul></ul><ul><ul><li>Perception of being established as a corporation </li></ul></ul><ul><ul><li>Ability to raise money through stock offerings </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  19. 19. <ul><li>Disadvantages to an S- Corporation: </li></ul><ul><ul><li>Complexity </li></ul></ul><ul><ul><li>Upon formation of S- Corporation must file Form 2553 with the IRS </li></ul></ul><ul><ul><ul><li>Can be fees associated with trying to make a late election or the election can be denied </li></ul></ul></ul><ul><ul><li>Accounting issues </li></ul></ul><ul><ul><li>Restrictions on shareholders </li></ul></ul><ul><ul><li>Governance issues associated with Corporations generally </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  20. 20. <ul><li>Tax Comparison between S- and C- Corporations: </li></ul><ul><ul><li>Example: Bob’s Tax Services, Inc </li></ul></ul><ul><ul><ul><li>Annual income = $100,000.00 </li></ul></ul></ul><ul><ul><ul><li>If filed as a C- Corporation: </li></ul></ul></ul><ul><ul><ul><ul><li>Federal corporate taxes = $35,000.00 </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Flat rate of 35% for personal services corporation </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Florida Corporate taxes = $5,500.00 </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Flat rate of 5.5% for FL corporate tax </li></ul></ul></ul></ul></ul><ul><ul><ul><li>If filed as an S- Corporation: </li></ul></ul></ul><ul><ul><ul><ul><li>Exempt from Federal and Florida corporate taxes </li></ul></ul></ul></ul><ul><ul><ul><li>Tax to shareholders on distributions is the same in both corporations </li></ul></ul></ul>Presented by the Robert Rogers Law Firm, PA
  21. 21. <ul><li>Professional Corporations generally: </li></ul><ul><ul><li>Professionals such as doctors, real estate agents, lawyers, etc. can use the PA designation with their corporation to set it apart and indicate the professional licensure of the shareholder(s). </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  22. 22. <ul><li>General description of an LLC: </li></ul><ul><ul><li>Historical background </li></ul></ul><ul><ul><ul><li>Florida enacted its LLC statute in 1982 </li></ul></ul></ul><ul><ul><ul><li>Law with respect to formation and treatment of the entity is still developing </li></ul></ul></ul><ul><ul><li>Also referred to as a hybrid entity </li></ul></ul><ul><ul><ul><li>Combination of a partnership and a corporation </li></ul></ul></ul><ul><ul><li>Owners are called members and their ownership interest is called a membership interest </li></ul></ul><ul><ul><li>Must file Articles of Organization with the State with a filing fee of $125.00 </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  23. 23. <ul><li>General description of an LLC: </li></ul><ul><ul><li>Company management and organization is defined in the LLC Operating Agreement </li></ul></ul><ul><ul><li>Statute does allow for single member LLCs </li></ul></ul><ul><ul><li>Multiple member LLCs are treated like partnerships by the IRS but can elect to be taxed as a corporation </li></ul></ul><ul><ul><li>Can also have professional LLCs </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  24. 24. <ul><li>Benefits of an LLC: </li></ul><ul><ul><li>Liability protection for the members </li></ul></ul><ul><ul><li>Flexibility within the Operating Agreement </li></ul></ul><ul><ul><ul><li>Division of Control </li></ul></ul></ul><ul><ul><ul><li>Division of Profits </li></ul></ul></ul><ul><ul><li>Flexibility in taxation </li></ul></ul><ul><ul><li>Protection of owners interests </li></ul></ul><ul><ul><li>Annual filing fees less than a corporation </li></ul></ul><ul><ul><li>Less rigorous requirements regarding the company books. </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  25. 25. <ul><li>Disadvantages of an LLC: </li></ul><ul><ul><li>Still have to maintain company books and deal with a more formal structure than a partnership </li></ul></ul><ul><ul><li>Law regarding treatment of LLC is still developing </li></ul></ul><ul><ul><ul><li>Less security in that regard </li></ul></ul></ul><ul><ul><li>Single-member LLCs sometimes do not have the full liability protection of an LLC </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  26. 26. <ul><li>Florida LLC vs. Florida Corporation: </li></ul><ul><ul><li>Tax issues </li></ul></ul><ul><ul><li>Liability protection </li></ul></ul><ul><ul><li>Formal structure </li></ul></ul><ul><ul><li>State filings </li></ul></ul><ul><ul><li>Classes of ownership </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  27. 27. <ul><li>General overview: </li></ul><ul><ul><li>More complex and specialized </li></ul></ul><ul><ul><li>Include: </li></ul></ul><ul><ul><ul><li>Limited Partnerships </li></ul></ul></ul><ul><ul><ul><li>Limited Liability Partnerships </li></ul></ul></ul><ul><ul><ul><li>Non-profit Corporations </li></ul></ul></ul><ul><ul><ul><ul><li>Standard or 501(c)(3) exemption </li></ul></ul></ul></ul>Presented by the Robert Rogers Law Firm, PA
  28. 28. <ul><li>Increasing popularity in using LLC’s for property holdings </li></ul><ul><li>Also can use </li></ul><ul><ul><li>Various trusts </li></ul></ul><ul><ul><li>LP, LLLP, etc. </li></ul></ul><ul><li>Benefit </li></ul><ul><ul><li>Separate liabilities from one another (business, personal, etc.) </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  29. 29. <ul><li>General Concerns: </li></ul><ul><ul><li>Where will you primarily be operating? </li></ul></ul><ul><ul><li>What other business will you be doing? </li></ul></ul><ul><ul><li>What are the state’s corporate or LLC laws? </li></ul></ul><ul><ul><li>What are the state’s corporate or LLC tax and filing fee structure? </li></ul></ul><ul><ul><li>What is the purpose of your business? </li></ul></ul>Presented by the Robert Rogers Law Firm, PA
  30. 30. <ul><li>General issues: </li></ul><ul><li>Questions? </li></ul><ul><ul><li>For any individual questions, feel free to set up a free consultation following the presentation. </li></ul></ul>Presented by the Robert Rogers Law Firm, PA

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