Formation of Corporations and Other Business Entities in Jacksonville and Orange Park
Prior to starting a new business, a business needs to make a decision on what kind of business entity they want to form. There are a few to choose from and choosing the right one depends on the specific business’ goals and needs. When consulting with a law firm, there are a few steps that need to be fulfilled before making a final decision such as:
- Determining marketing, financial, and management plans by creating an initial business plan.
- Determine sources of start-up capital and backup sources, if necessary.
- Pick a business structure that best suits the needs of the company by considering factors such as legal exposure and tax advantages.
- Satisfy requirements for the firm’s Federal Employer Identification Number.
- Set up a Cash Flow Budget to determine how much money it will need to support the business during its operation.
Forming a Business Entity in Florida
There are a few types of business structures that new companies can choose from and each are different depending on what the business’s needs and goals are. A few choices that are available include:
- General Partnership – this type of business is owned by two or more owners and these owners both share any profits or losses in the company. Both owners have the advantage of tying the other to any transactions and both their percentages of those profits and losses on their personal tax returns to the IRS.
- Subchapter C-Corporation – this business is more complex in that both owners are shareholders in the company. They would be responsible for electing individuals to represent their interest called Directors who would meet yearly and elect others to perform operations. A C-Corp would be subject to double taxation – both as a business entity and for the owners.
- Limited Liability Company (LLC) – this one combines some parts of a partnership and a corporation as well as other unique features that let business owners determine how they want to be taxed and held liable. It is the most popular choice among business entities.
- Sole Proprietorship – this is the easiest business entity to form as there is no formal documentation or paperwork to be done with the exception of a business or occupational license. The business owner is responsible for all debts, taxes, and liabilities as well as any profits or losses. At the end of the year, the owner pays income tax on the profits from their business.
Our Business Law Firm Serves Clients in the Jacksonville and Orange Park areas
Once it has been decided on what the business entity will be, it is recommended that an agreement is drafted that will define the relationships that will be shared between shareholders, members, partners, and managers. If it is decided that an agreement will not be necessary, there are some general provisions that can be used from the Florida Statutes. Defer to a business law attorneys in Jacksonville or Orange Park when contemplating these important decisions that will impact the future of your Florida business.
Call our Law Firm For a Free Consult and Assistance With Business Entities.