Which Corporate Entity is Right for Your Florida Business?

It’s not all that difficult to choose which corporate entity is right for your Florida business. Here are your choices, and a little bit about each type of corporate entity. Annually in Florida there are about an equal amount of for profit corporations filed as there are Limited Liability companies formed. Usually the choice of business type is one of these.

We didn’t mention Non-Profit companies here, as they are quite a bit different from regular corporate entities. A Non-Profit is designated as such only after IRS approval which may take months to secure.

Limited Liability Company

In the year 2007, over 135,000 limited liability companies (LLCs) as they are usually called, are a blend of business combining some features of both partnerships and corporations.

Florida limited liability companies may choose whether they wish to be  taxed as partnerships or corporations. Limited liability companies must register with the Florida Division of Corporations to legally do business in Florida. Fill out our simple online LLC form here.

Profit corporations

In 2007, over 135,000 new “for-profit” businesses registered in Florida state with the Florida Division of Corporations.

Corporations are separate legal entities than the individual that owns them. Each corporation must file with the Florida Division of Corporations. We assist you with that matter when you fill out our easy to follow incorporation forms here on this site.

The two types of corporations are the C-Corporation and the S-Corporation. With a C-Corporation, the corporation rather than individuals pays taxes and assumes liabilities. Florida’s corporate tax is just 5.5%.

An S-Corporation allows up to 75 shareholders to share income and expenses and to report income/expenses on their individual end of year income tax returns filed with the IRS.

Non-Profit Companies

These start out as profit corporations until they are later designated as Non-profit companies after complying with all IRS requirements as governed by the Internal Revenue Code, Section 501(c)(3.

The Non-Profit company exists foremost as a provider of programs and services that benefit others which ordinarily would not otherwise be provided by local, state, or other government offices. Non Profits can earn a surplus, but the earnings are not distributed to employees or any individuals, they are held by the company and reinvested toward future programs and services.

There exist many grants and other programs to help non-profit companies succeed. Google, YouTube, Flickr, and many other online properties have special programs designed to help non profit organizations advance their good cause and help others.

Sole Proprietorship

We don’t recommend doing business in this capacity as there are a couple of drawbacks to it. Serious drawbacks. One benefit is ease of creation. Sole proprietorships are easy to set up and easy to disband.

Profits for this type of entity are taxed at the sole proprietor’s individual federal tax rate as reported tax form Schedule C or CZ. Florida sole proprietorships don’t file FL business (corporate) income tax returns. Sole proprietor owners have virtually unlimited personal liability for any legal debts or other obligations their Florida business incurs during it’s lifetime. Familiarization with Florida’s “homestead laws” are important because they limit this liability somewhat.

Partnerships

Partnerships are not that popular, just over 3,000 partnerships filed documents with Florida state to become registered in Florida during 2007.

Partnerships are easily formed. Florida business partnerships are unincorporated and allow for 2+ persons to share liabilities and join capital for the business. Florida business income from the partnership is reported on each partners individual tax return. Limited partnerships must register with Florida state, and the fee initially is $965 and $500 annually in years following.

Choose the type of business entity that is right for your business carefully. Accountants are great sources of knowledge, but can often times try to swing you into incorporating with them at very high cost. Your best bet is to make an appointment with your accountant, ask all the questions you need and return home to fill out our simple online incorporation forms for just $195 for profit, non profit, and Subchapter S companies or just $265 for LLC companies. Don’t pay more, there’s no need to – we give you rush service at no cost to you.

Possibly Related Posts:

• Florida Incorporating Costs: What’s Fair?
• Incorporating Your Business