Congratulations on starting a new company! Before you start transacting business you should take the time to agree upon the terms and allocation for the ownership of the company. This is one of the biggest and toughest decisions, but it is one of the most crucial ones to get right from the start. Even minor differences in ownership could mean a lot in the future. Starting off with everyone on the same page will prevent big issues from arising in the future. With a business lawyer on your team you can be confident that your legal ducks in a row and focus on growing your business.
Currently, it costs $125.00 to form an LLC in Florida. The decision to seek the advice of a Florida business lawyer is significant. An attorney will ensure that there is a sound basis for your business to move forward. For example, there will be a structure for resolving disputes and the rights and obligations of each member will be defined. You should speak with a Florida business lawyer to ensure that your new business is setup for success.
The majority of clients come to me after a dispute has already occurred. Most of these disputes could have been avoided or resolved if they met with when they started their business. The first thing I do is examine their operating agreement, if they have one. Sometimes the operating agreements are purchased from LegalZoom or other do-it-yourself (“DIY”) sites. I cannot stress enough that forming an LLC or other entity should not be done using DIY or other out of the box formation. The old saying “you get what you pay for” could not be true in this regard. The price you pay reflects the predictability and transparency of resolving future conflicts. The cost of litigating business disputes can cost several thousands of dollars and could result in termination from the business. It is a wise investment to be safe than sorry and hire an experienced business lawyer. The following are some items you should consider obtaining for your LLC:
- Operating Agreement
- Subchapter S Election
- Doing Business As (“DBA”) or Fictitious Name
- Independent Contractor Agreement
- Management Agreement
- Employment Agreements
- Security Agreements (if you loan money to your business)
- Indemnification Agreements
- Leases for Home Office, Equipment, and Vehicles
As you can see, LLCs are more complex than meets the eye. Having an experienced business lawyer draft or review your agreements will often shed light on things that are often clouded by the excitement of starting a business. Our firm can help your business start off on the right foot.
Call (407) 862-9449 to schedule a free thirty minute case assessment to discuss your business needs.
A Limited Liability Company, also known as an LLC, is a hybrid organization with characteristics of a corporation and a partnership. LLCs can choose to be taxed as a partnership or a corporation. LLCs are run by a Manager(s) and can be owned by a Member or several Members. Management of a LLC is governed by Florida statute unless members agree otherwise. A carefully drafted operating agreement is one way to control and protect the LLC’s assets among other things.
The following is a summary of why some people choose LLCs:
1. Limit Owner’s Liability. The primary reason for forming a limited liability company is to limit the liability of the owners. If you are sued, your creditors should not be able to get your personal assets.
2. Charging Order Protection. Interests in LLCs are protected from the claims of creditors of their members. For example, if a creditor of a member gets a charging order against the interest of the member, the creditor cannot acquire the debtor’s interest in the LLC. Therefore, the creditor cannot acquire the assets of the LLC. As a result, the creditor must wait until the manager makes a distribution to the member/debtor to get paid. Corporations do not enjoy this protection.
3. Taxes. Most LLCs are not subject to Florida’s corporate income tax. Like partnerships, profits and losses will flow through to the owners. This avoids double taxation.
4. Flexibility. LLCs have the flexibility to draft their operating agreement to cover issues such as members’ contribution obligations, member and management voting powers, profit and loss allocations, governance structure, members’ distribution rights, etc. Amendments and organizational changes related to the LLC can generally be made in the operating agreement alone (without amending the articles of organization).
5. Anonymity. LLCs provide a degree of anonymity. LLCS help keep your name out of databases and asset searches.
6. Formalities Not Required. A corporation requires specific formalities be followed including annual meetings of shareholders and directors each year, meeting minutes which are kept with the corporation’s records, etc. These formalities are not required for LLCs. However, it is a good idea for your LLC to document major decisions even though these formalities are not required.
7. Allocations of Profits and Losses. Unlike S corporations, LLCs can make special allocations of profits and losses among its members. S corporations have one class of ownership with profits and losses allocated according to the percentage of ownership.
As you can see, LLCs are more complex than meets the eye. Having an experienced business lawyer draft or review your agreement will often shed light on things that are often clouded by the excitement of starting a business. Our firm can help your business start off on the right foot.
Call (407) 862-9449 to schedule a free case assessment and discuss your business needs.
If you own a business, it is important to establish an agreement or contract with those you do business with. It will take a little more effort than a handshake and may cost for an attorney to draft or review the written contract. However, you will have the peace of mind knowing that should the worst happen your business will be protected.
An experienced business attorney will make sure the necessary clauses are included to protect your business. For example, a prevailing party clause explains what costs and fees the losing party is responsible to pay to the winning party. If you did not have a contract, and if there is no law giving you a right to collect fees and costs, then each party will have to bear their own expenses. Costs and fees include attorney’s fees which can add up quickly should the matter be filed in court. It is already bad that the deal fell through. It could be worse if you have to pay an attorney out of pocket with no possibility of recouping those costs.
Most business owners forgo seeking the help of an attorney to draft or review their contracts because they think it is too expensive. What they do not realize is that if the other party does not fulfill their obligations then they will probably have to hire an attorney anyway. Most business owners meet with me after the deal falls through. At this point, I am trying to figure out what the terms of the agreement were and how we can prove such agreement. There is no reason for it to get to this point.
I would advise having an attorney review or draft your contracts before you seal the deal. Paying an attorney to do this could save you a lot of time and money down the road. My firm offers flexible payment options to fit the needs of any business. You can hire us for a specific task or you can make us part of your team. We have monthly plans that include consults (in person or over the telephone), document review, and other services.
To discuss your business needs call (407) 862-9449.
Annual reports are due by May 1, 2015. An annual report must be filed each year for your business entity to maintain an “active status” with the Florida Department of State. The report is used to update or confirm that the data on file with the Division of Corporations is current.
The fees for a timely filed report are as follows:
$150 for a profit corporation
$61.25 for a not for profit corporation
$138.75 for a limited liability company
$500.00 for a limited partnership or limited liability limited partnership.
A $400.00 late fee will apply to all of the above listed entities, except not for profit corporations, if their annual reports are filed after May 1st. The $400.00 late fee cannot be waived or abated.
Click here for an annual report overview and step-by-step instructions.
Click here to file your annual report online.