Forming a New Business

Forming the correct type of entity can be critical to the success of your business. Most owners and partners form a business entity for taxes or protection or both. In order to actually realize these benefits, the right entity has to be chosen to meet your goals. There is no “one entity fits all”

Minimizing Legal Risks and Liabilities

The ultimate goal of a business attorney should be to minimize the legal risk that can derail your business, and its critical that you use a business attorney, because without the specialized training and knowledge, a regular business person doesn’t even know what could blindside them from a legal standpoint.

Becoming Personally Liable for errors committed by you or your employees while operating the business. A Corporation or an LLC is a separate legal entity, and thus it can stand on its own, including making up for any mistakes. However there are certain steps that need to be taken, or else that protection can be bypassed if there are any damages or liabilities in excess of what the company can pay.

Having a large tax bill because you didn’t know the tax benefits and advantages of one entity over another. Congress and the IRS are continually updating and changing laws as to what you can or can’t do with regards to business deductions and who has to take a salary, and a lot of the laws defy common sense, so there is often no reasoning it out, and ignorance of the law is no excuse.

Common Florida Business Entities

The most common entities formed in Florida are Limited Liability Company, Corporations, and Limited Liability Partnership. Not only do you need to select the right entity, but it also must be formed correctly. Just applying and paying the fee online at the Secretary of State’s Website (sunbiz.org) is not sufficient when it comes to obtaining the advantages and protection you sought. In fact, not taking all the necessary steps may result in unanticipated expenses and risk that could set back, or even destroy an otherwise thriving business. When forming a new business, as mentioned, there are tax and business considerations, and they don’t always work together. Sometimes you may have to choose whether or not the tax or the protection is more important. Both “S” and “C” corporations are the same under Florida Business Law They are Tax Designations only, and the decision of which entity, and whether or not to make any tax elections need to be made with the big picture in mind.

One of the more important decisions you can make when you start a new business is choosing the entity. Save yourself money and problems down the road. consult with a reputable business attorney before making any decisions. The Law Offices of Marc J. Miles can advise you to make an appropriate decision based on your individual situation.