Frequently Asked Questions

Florida recognizes several common business structures, including:

• Sole Proprietorship: A business owned and run by one person, with no legal distinction between the owner and the business.
• Partnership:A business owned by two or more people.
• Limited Liability Company (LLC): A hybrid structure offering the liability protection of a corporation with the tax advantages of a partnership.
• Corporation (Inc.): A separate legal entity owned by shareholders. Can be either C-Corp or S-Corp.
• Joint Venture: A temporary partnership for a specific project.

The best structure depends on several factors, including:

• Liability: How much personal liability are you willing to assume?
• Tax Implications: How will the business be taxed?
• Administrative Burden: How much paperwork and compliance are you willing to handle?
• Future Growth: Do you plan to seek investors or go public?
• Ownership: How many owners will there be?

A sole proprietorship is the simplest form of business organization, where one person owns and operates the business. There's no legal distinction between the owner and the business. 

Advantages include:

• Easy and Inexpensive to Set Up: Minimal paperwork and costs.
• Direct Control: The owner makes all decisions.
• Pass-Through Taxation: Business profits are taxed as personal income.

Disadvantages include:

• Unlimited Liability: The owner is personally liable for all business debts.
• Limited Access to Capital: Difficult to raise funds.
• Business Ends with Owner: The business typically ceases to exist if the owner dies.

A partnership is a business owned by two or more people who agree to share in the profits or losses of the business. 

Common types include:

• General Partnership: All partners have unlimited liability.
• Limited Partnership (LP): Has general partners with unlimited liability and limited partners with limited liability.
• Limited Liability Partnership (LLP): All partners have limited liability for the debts and obligations of the partnership.

Advantages include:

• Relatively Easy to Set Up: Less paperwork than corporations.
• Shared Resources and Expertise: Partners can pool their skills and capital.
• Pass-Through Taxation: Profits are taxed as personal income.

Disadvantages include:

• Potential for Conflict: Disagreements between partners can arise.
• Liability Issues (General Partnerships): General partners have unlimited liability.

An LLC is a business structure that offers the liability protection of a corporation with the tax advantages of a partnership or sole proprietorship.

Advantages include:

• Limited Liability: Members are generally not personally liable for business debts.
• Flexible Taxation: Can be taxed as a partnership, sole proprietorship, S-Corp, or C-Corp.
• Less Administrative Burden: Fewer compliance requirements than corporations.

Disadvantages include:

• More Complex than Sole Proprietorships/Partnerships: Requires more paperwork to set u
• State Fees: Florida charges fees to form and maintain an LLC.

A corporation is a separate legal entity owned by shareholders. It can enter into contracts, sue or be sued, and own property. 

The two main types are:

• C-Corporation: Taxed separately from its owners.
• S-Corporation: Profits and losses are passed through to the shareholders and taxed as personal income.

Advantages include:

• Limited Liability: Shareholders are generally not personally liable for corporate debts.
• Easier to Raise Capital: Corporations can issue stock to investors.
• Perpetual Existence: A corporation can continue to exist even if ownership changes.

Disadvantages include:

• More Complex and Expensive to Set Up: Significant paperwork and legal requirements.
• Double Taxation (C-Corps): Profits are taxed at the corporate level and again when distributed to shareholders as dividends.
• More Regulatory Compliance: Corporations face stricter regulations.

A joint venture is a temporary partnership formed for a specific project or purpose. 

Advantages include:

• Shared Resources and Expertise: Partners can combine their strengths.
• Limited Duration: Can be structured for a specific project.

Disadvantages include:

• Potential for Conflict: Disagreements between venturers can arise.
• Liability Issues: Depending on the structure, liability can be a concern.

While not legally required, it's highly recommended to consult with an attorney. An attorney can:

• Explain the different business structures: Help you understand the pros and cons of each.
• Advise you on the best structure for your business: Consider your specific needs and goals.
• Prepare and file the necessary paperwork: Ensure your business is legally formed.