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The general partnership is similar to the sole proprietorship, only difference is that now we are talking about two or more persons doing a business for profit.
All the same rules will apply here as well. You should file for a fictitious name and apply for all the appropriate State and County licenses.
The general partnership also has no limited liability and all the partners will be jointly and severally liable if anything goes wrong in the business.
The Florida LLC is one of the best business entities to start your business Florida. The LLC provides you with a lot of flexibility compared to the Florida Corporation.
The LLC also allows you to make tax elections depending on the amount of Members it has. If an LLC has one member it will be treated as a disregarded entity for tax purposes. If the LLC has two members or more it will be treated as a partnership. Regardless the amount of members, the members of the LLC may make an election for the LLC to be taxed as a “C” or an “S” Corporation.
The Florida LLC also provides you limited liability protection. The one caveat in Florida is that if the LLC is a single member LLC, the individual member’s creditor may foreclose on your interest if they are able to show that the LLC will not pay them in a foreseeable reasonable time.
However, if the LLC has two or more members, then the only remedy that creditors have is to obtain a charging other. A charging other only allows the creditors to have access to the distributions that the LLC would otherwise make.
When most people think about starting a business the first thing that will pop into their minds is to create a Florida Corporation. It is the most popular as far as business vehicles. However, what most people don’t know is that if an “S Election” is not made by the Corporation, the Corporation has a double tax.
A “C Corporation” pays a double tax. The first tax that the Corporation pays is on the income that the Corporation is receiving. The second level of tax is when the Corporation pays out a dividend to its shareholders.
With the 2017 Tax Act, the Corporation’s taxes were reduced to 21%. Having a Corporation may be favorable if dividends will not be payed out and the Corporations plans to reinvest its capital. This is in fact much lower than the highest individual rate of 37%.
The Florida Corporation also provides limited liability, but it also has its caveats. The Florida Corporation is more likely to have issues due to Director’s liability and duties to shareholders. In addition, shareholders may request books and records of the Corporation and make it otherwise cumbersome to the Corporation.
There are many factors that are analyzed when choosing the right business entity. Let us help you make the best decision for you and your business. We want to see your business thrive with success.
Call us today at (305) 489-1415 or complete the form in this page for a free consultation with our Miami business attorney.