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BUSINESS FORMATION (LLCs, LIMITED PARTNERSHIPS, CORPORATIONS)

Starting your own business is an exciting time, but there are many pitfalls that need to be avoided to ensure that your business is starting off on the right footing. One of the main questions that prospective entrepreneurs will encounter is determining which type of business entity to create – or whether one will even need to be formed in the first place (most likely, one should be created). The knowledgeable business formation attorneys at Gorman & Jones, PLC are experienced in creating business entities for our clients, such as Limited Liability Companies, Limited Partnerships, and Corporations. Call our Tampa, Florida office today at (813) 856-5625 to schedule a free initial consultation to determine the best course of action in creating your business and setting it up for success.

Limited Liability Company Attorneys

Limited Liability Companies (LLCs) are arguably the most common type of business entity formed in Florida. There is a very important reason for this: they are simple and inexpensive to create, and they are inexpensive to maintain.

What is an LLC?

An LLC is created by filing the Articles of Organization with the State of Florida. This can be done online or by mail. Regarding the management structure of LLCs, there are two types that can be chosen: manager-managed or member-managed. A member-managed LLC is simply that: the members (the owners) of the LLC are the individuals who will conduct the day-to-day operations of the LLC and will run the business. In contrast, a manager-managed LLC will have the members appoint managers to conduct the day-to-day operations of the LLC and run the business. There are two important facts to note: the managers do not have to be members of the LLC, and LLCs may be single-member (meaning that there is only one owner of the LLC). The Articles of Organization will indicate how the LLC will be managed.
The Operating Agreement for the LLC will dictate the internal governance of the LLC. Unlike the Articles of Organization, the Operating Agreement is not a public document and will not be filed with the State of Florida. The Operating Agreement will detail the ownership of the LLC, the rights of its members, how profits and losses will be allocated, and what will happen in the event of disagreements or other events.

Why Choose an LLC?

One of the most advantageous aspects of an LLC is that this type of business entity protects its members from personal liability of the LLC’s debts and other liabilities. This (among other default rules governing LLCs) is codified in Florida’s Revised Limited Liability Company Act. (See Florida Revised Limited Liability Company Act.). A second advantageous aspect of an LLC regards taxation. LLCs are not taxed as separate business entities – the profits and losses of the LLC “flow through” to the members and the members are taxed on the profits as their income.

Creating a business can be a complex matter and the endless options can seem overwhelming, but the business formation attorneys at Gorman & Jones, PLC are experienced in creating business entities for our clients and will guide you to the best option for your entrepreneurial goals. Call our Tampa, Florida office today at (813) 856-5625 to schedule a free initial consultation to determine the best course of action in creating your business and setting it up for success.

Corporation Attorneys

A different type of business entity that is often formed in Florida is a Corporation. There are many different options when creating a Corporation, primarily focusing on tax advantages.

What is a Corporation?

The most common type of Corporation that is created for growing businesses is known as an S-Corporation. This tax status of business entity provides the ideal tax status for these fledgling businesses because they can take advantage of a “flow-through” taxation for profits, just like an LLC. This means that the profits and losses “flow through” the Corporation to the shareholders of the business and the shareholders will report the losses of profits of the business on their income tax return.

Like an LLC, a Corporation is created by filing with the State of Florida. The document that is filed to create a Corporation is call the Articles of Incorporation. Additionally, the internal governance of a Corporation is detailed in their Bylaws. The Bylaws will state how the business is to be run, what the roles and duties are of the various positions within the Corporation, the guidelines on how to transfer or sell shares, how profits are distributed to the shareholders, among other actions or events.

Why Choose a Corporation?

There are numerous advantages in creating a Corporation. The first (and likely most obvious) advantage is the liability protection this business entity offers. Since a Corporation is a separate legal entity, the shareholders are protected from the liabilities and debts of the Corporation. This means that the shareholders will not be personally liable if any liability is incurred on behalf of the Corporation. The second advantage is that the transfer of ownership in a Corporation is easy. There are a few restrictions on who can hold shares in a Corporation electing S-Corporation status (and others which may be governed by the Corporation’s bylaws), but a shareholder is generally free to transfer or sell their ownership interest in the Corporation in a simple conveyance.

Creating a business can be a complex matter and the endless options can seem overwhelming, but the business formation attorneys at Gorman & Jones, PLC are experienced in creating business entities for our clients and will guide you to the best option for your entrepreneurial goals. Call our Tampa, Florida office today at (813) 856-5625 to schedule a free initial consultation to determine the best course of action in creating your business and setting it up for success.

Limited Partnerships

Like all partnerships, Limited Partnerships are business entities that involve two or more people who own interest in the partnership. Unlike a general partnership, a limited partnership has two different classes of partners: limited partners and general partners. The general partners are the individuals who own and operate the business whereas the limited partners simply invest in the Limited Partnership (typically by investing money) but do not have the ability to make business decisions regarding the management or operations of the Limited Partnership. Further, as the titles suggest, the general partners have “general” liability, meaning that they can be personally sued for the debt obligations of the Limited Partnership, whereas the limited partners have “limited” liability, meaning that they are only liable for the debts of the Limited Partnership up to their investment and will not be personally liable for the debts of the Limited Partnership.

Limited Partnerships are fantastic business entities to utilize as holding companies. These are companies created for tying multiple business entities together under a common ownership while maintaining (or creating additional) liability protection. Although Florida allows limited partnerships to be created, some of the most advantageous laws in the United States regarding Limited Partnerships is located in Arizona – where the law firm of Gorman & Jones, PLC began its operations and still maintains a law firm location. Therefore, the experienced business formation and asset protection attorneys at the law firm of Gorman & Jones, PLC will guide you to the best option for your business formation and asset protection goals. Call our Tampa, Florida office today at (813) 856-5625 to schedule a free initial consultation to determine the best course of action in creating your business and setting it up for success.

Tying it all Together: Your Business and Your Estate Plan

One of the most frequently asked questions by our clients is “what will happen to my business when I die?” This is what makes the business formation attorneys at the law firm of Gorman & Jones, PLC stand above the rest: we will create your business while keeping all of life’s uncertainties in mind. The business formation attorneys at Gorman & Jones, PLC will go above and beyond simply creating your business, since we will also take every step allowed under Florida law to protect the legacy you create through your business and allow your business to transition to the next generation. Call our Tampa, Florida office today at (813) 856-5625 to schedule a free initial consultation to determine the best course of action in creating your business and ensuring a smooth transition to the next generation.

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