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.