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Florida Business Entities
 

Florida Business Entities

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    Florida Business Entities Florida Business Entities Presentation Transcript

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