Choosing a legal structure for your business can be intimidating.

There are many factors you have to take into consideration as the structure you choose can have a lasting effect on your success.

Before you make a decision, let’s review business forms that are common in Florida:

Sole Proprietorship

Are you a lone wolf in your business? If so, sole proprietorship may appeal to you. It is the most common structure used; fairly simple and inexpensive to set-up, and just as easy to dissolve.

However, sole proprietorship does not provide much protection for entrepreneurs. You can be held personally liable for business-related debts and taxes; and you cannot take advantage of the tax breaks LLC’s and corporations receive.

Partnership

A partnership is commonly used when more than one individual has ownership in a business. While it is fairly simple to set-up, it is not always as simple to dissolve.

Like a sole proprietorship, the partners can be personally liable for debts incurred by the business, taxes and other financial obligations.

Corporation

A corporation is a legal entity and unlike a partnership, it must be registered with the state of Florida.

There are two types of corporations: c-corp and s-corp.

In a c-corp, the corporation is responsible for its business debts and there is no personal liability.

In contrast, shareholders can split business debts and tax liabilities in an s-corp, and report the corporation’s income on their personal taxes.

Limited Liability Company (LLC)

An LLC is often referred to as a “hybrid” because it has elements of both partnership and corporation structures. It must be registered with the state of Florida and there can be several shareholders involved.

As for tax liability, an LLC can decide whether it wants to be taxed as a corporation or as a partnership.

Which structure is best for you?

Choosing a legal structure for your new venture is not a decision to take lightly.

How you organize the business will affect what you pay in taxes and your personal liability for the company’s financial obligations.

Consult our attorneys for help deciding which structure is best for you. Call 954-779-7009 to schedule a consultation.