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Written by Mark Hankins
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Jun 14, 2007 at 02:53 PM |
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Every new business must choose a business form. Common business forms include corporations, LLCs, partnerships and sole proprietorships. The first two business forms typically provide legal advantages unavailable to the latter two forms.
Corporation (Standard or Subchapter S) or Limited Liaibility Company (LLC) In these business forms, the founders issue shares of stock or ownership certificates. Ownership and control of the business depends on ownership of stock and on any agreements among the shareholders. The key advantage of these two business forms is the ability to limit owners' liability for the business's debts and accidents to the amount of money invested in the business. For information on corporate filings and fees, contact the Florida Department of State. More incorporation information is available from Florida Incorporators, Inc. Please see their Frequently Asked Questions Page (FAQs) regarding details of forming a business entity in Florida.
Partnerships and Sole Proprietorships In a partnership, control of the business is shared by the partners, however, this is the most difficult arrangement to manage from a legal, tax and accounting standpoint and from a practical standpoint exposes the partners to liability risks that can be avoided or limited by the use of a form that has limited liability. A limited partnership can assure a general partner of control over the business while reducing the business risk for nonmanagerial, investing partners who become limited partners, however limited partnerships are no longer cost-effective compared to LLCs. In a sole proprietorship the owner has absolute authority over all business decisions, however, not only is liability not limited, but the value of the business can disappear overnight if the owner dies or becomes disabled. Fictitious Trade Names If a business will use any name other than the given name of the owner or owners, and the business is not incorporated and doing business in its exact corporate name, a fictitious name must be registered with the state. The fictitious name must be renewed every five years. For more information and to obtain the appropriate forms, please contact: The Florida Department of State Fictitious Name Registration.
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Last Updated ( Jun 15, 2007 at 12:52 PM )
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