Many business owners in Florida who have experienced considerable success want to incorporate their venture. The advantages clearly outweigh the disadvantages when all factors are considered. While incorporating may not be a good move for every business owner, it can be the ticket to even more success when the move could increase operating capital along with profit margins. This is indeed a very serious business and often personal decision for most, and it is important for all company management teams to understand their options and governmental requirements when incorporating.
Choosing a corporation type
Corporation establishment statutes in Florida allow for six different types of corporations. Sole proprietorship and partnership businesses can be incorporated just like the more common entities of an LLC, LLP, S corporation, or C corporation. However, partners in a designated corporation are issued shares as opposed to using an operating agreement stating ownership percentage. A board of directors and annual meeting dates must be set as well. An S corporation functions much like an LLC in that the income passes through to shareholders while a C corporation is a stand-alone entity with additional corporate tax obligations.
Filing articles of incorporation
Corporations in Florida are completely separate financial entities from the stockholders and management team, and there are strict reporting and taxation obligations. Corporations essentially have many similar rights of personhood, but they are governed under corporate law principles. Each new corporation must file with the state and decide the type of corporation they want to select, along with whether they will be either private or public. The board of directors must also be named in the filing.
Potentially the important element of incorporating a business is deciding whether it will be public or private. A public corporation has the authority to issue shares to public buyers, but the rules of governance and qualification are also much more complex.