Should You Incorporate Your Florida Business?
Operating a business anywhere poses its share of challenges. One such challenge you may face is whether or not you should incorporate your business. If you operate a business in the state of Florida, you may be thinking about incorporating and wondering whether or not doing so would create more benefits than risks. Incorporating can offer you and your business some great benefits, but it does come with some complex legal issues. For this reason, you may wish to seek the help of a Fort Lauderdale business litigation lawyer. The right lawyer can help you with the paperwork and tax issues. Continue reading below to find out more about the pros and cons of incorporating your business in Florida.
Why Incorporate in Florida
Florida currently has one of the best climates for business in the United States. Some of the most prominent benefits of incorporating include personal asset protection, tax advantages, and credibility.
As a corporation, you limit your liability for business debts and other obligations. With an unincorporated business, owners may be personally responsible for paying back loans and other debts. As a business owner, you know you may be susceptible to double taxation. The government may tax you at a corporate level and an individual level. As an LLC, you protect yourself from double taxation. You can distribute business profits as dividends, allowing you to claim business profits on an individual level. This saves you from the 5.5% state tax on corporations.
As an LLC, you need to keep track of business meetings throughout the year. However, law requires fewer formalities. For instance, as a corporation, you are not required to document minutes or resolutions.
Disadvantages of Incorporating
Any legal structure comes with its share of disadvantages. Forming an LLC will cost you more upfront than forming a sole proprietorship or general partnership. As an LLC, you will be more limited if the time ever comes for you to transfer ownership. When you establish the LLC, you should be sure to outline in the operating agreement whether or not it can transfer ownership. You will also need to define conditions for the transfer to happen.
One of the biggest disadvantages is the lack of case law protection. Other legal structures have been around for much longer. This means the courts have heard more cases regarding other legal structures. LLCs are new, and fewer cases have been heard to outline these protections.
In order to form an LLC, you will need to submit various articles of incorporation to the state. These will outline authorized shares, registered agents, and other key details. The registered agent needs to have a physical address in Florida. If you plan to incorporate, legal assistance will be necessary. Other aspects of incorporation, such as naming, may be subject to approval by a respective organization.
Planning Your Incorporation
If you plan to incorporate in Florida, you should seek the assistance of a Fort Lauderdale business lawyer. An attorney can help your incorporation go smoother and make sure all your paperwork is in order. Though incorporation is not a simple process, it has the potential to produce great benefits. Contact an attorney at the office of Edward J. Jennings, PA, today to discuss your plans to incorporate.