Florida Corporations & Florida LLC's


What is a Florida Corporation?

Federal and state laws view the corporation as a legal person, separate and apart from its owners. This means the corporation can enter into its own contracts, incur its own debts, and pay its own taxes. A corporation is created and regulated by state law.

What is the difference between Florida C corporations and Florida S corporations?

For tax purposes, there are two types of corporations: “C” corporations and “S” corporations. A C corporation is taxed twice on its profits and the owners cannot write of the losses personally. An S corporation gets the pass-through tax treatment where the profits are only taxed once and the owners are able to write off the losses.

How do I choose a name for my Florida Corporation.

Take your time to choose a name of your liking and be sure it looks appealing with a suffix such as Inc., Corp. or Co. at the end of the corporate name.

What are the benefits of incorporating?

A corporation has continual existence.  Contrast this against a sole proprietorship or partnership ends when a partner or owner dies.  Thus, if the surviving spouse or heirs of a partnership owner want to continue the business in their own names, it will be considered a new/different business. A Corporation on the other hand enjoys a continual existence even if the owners pass away.

Ease of maintaining control of your business.  By distributing stock, the Shareholder of a corporation may share profits of the business without giving up control. This is obtained by keeping a majority of stock of the issued stock or by issuing differing classes of stock, such as voting and non-voting stock.

Raising Capital tax free.  A corporation may raise capital by selling stock or borrowing money and most importantly, a corporation does not pay taxes on money it raises by the sale of stock.         

Other tax advantages.  The following advantages are only available to corporations:

Losses/expenditures are fully deductible for a corporation whereas an individual must prove there was a profit motive before deducting a loss. 

Dividends do not endure a corporate tax at the federal or state level if the owner chooses to elect to be a sub chapter s corporation. 

Tax differed trusts may be set up for the owners retirement plan.

Medical insurance for your family may be deductible. 

One of the main reasons for forming a corporation is to limit the liability of the owners.  For instance, in a sole proprietorship or partnership the owners are personally liable for the debts and liabilities of the business, and creditors can go after all of their assets to collect.  If a corporation is formed and operated properly, the owners can be protected from all such liability. 

How many owners and officers do I need?
You need only one owner (shareholder), director and officer.



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