As a lawyer based in Florida, I can provide various services to form new company entities for clients, including new incorporations (Corp. or Inc.) and forming new Limited Liability Companies (LLCs). Here are the types of services I can offer:
- New Incorporations: This involves creating a new corporation as a legal entity separate from its owners. You can assist with preparing and submitting the necessary paperwork and filings through the Sunbiz portal.
- LLC Formation: Limited Liability Companies (LLCs) offer flexibility in terms of management and taxation, and they provide liability protection to their owners. You can think of them as a hybrid between a corporation and a partnership.
- As part of the company formation process, I also act as a Third Party Designee (TPD) with the U.S. Internal Revenue Service (IRS) and apply for your company’s federal tax I.D. number (EIN or FEIN).
Specific tasks and services I offer include:
a. Name Availability Check: help clients check the availability of their desired business name using the Sunbiz portal’s name search feature. This ensures that the chosen name is not already in use by another company in Florida, and any possible confusions or misleading can be avoided or minimized.
b. Articles of Incorporation/Formation: preparing the Articles of Incorporation or Articles of Organization (for LLCs). These documents outline important information about the company, such as its name, registered agent, principal place of business, and the names of the owners or directors.
c. Filing Documents: electronically file the Articles of Incorporation or Articles of Organization on behalf of clients. This includes providing the required information, paying the necessary fees, and submitting the documents for processing.
d. Registered Agent Services: registered entities are required to have a registered agent in Florida, who acts as a point of contact for legal and administrative matters. I offer such registered agent services to clients, acting as their representative and receiving official documents on their behalf.
e. Annual Report Filing: After the initial formation, companies in Florida are required to file an annual report to maintain their active status (between January 1 and May 1 of each year). I assist clients with filing their annual reports, ensuring compliance with state regulations, and keeping the company “alive and active”.
What’s Better? To run a business as a “Sole Proprietor” or under its own separate legal entity?
There are several advantages to running a business as a sole proprietor as opposed to forming a separate company entity:
- Simplicity: Running a business as a sole proprietor is much simpler and less time-consuming than forming a separate company entity. You don’t have to worry about filing separate tax returns or complying with complex legal formalities.
- Cost: Setting up a separate company entity can be expensive. As a sole proprietor, you don’t have to pay for legal fees, filing fees, or other expenses associated with forming a company.
- Flexibility: As a sole proprietor, you have complete control over your business. You can make decisions quickly and easily without having to consult with other owners or shareholders.
- Privacy: As a sole proprietor, you don’t have to disclose as much information about your business as you would if you formed a separate company entity. This can help you maintain a level of privacy and protect your personal assets.
- Tax benefits: As a sole proprietor, you can take advantage of certain tax benefits that aren’t available to owners of separate company entities. For example, you can deduct business expenses from your personal income taxes, and you may be able to avoid some of the double taxation that can occur with separate company entities.
However, it’s important to note that there are also disadvantages to running a business as a sole proprietor. For example, you are personally liable for all business debts and liabilities, and you may have a harder time raising capital or attracting investors. Ultimately, the decision of whether to run your business as a sole proprietor or form a separate company entity depends on your individual circumstances and goals. It’s a good idea to consult with a lawyer or accountant before making a decision.
While there are advantages to running a business as a sole proprietor, there are also several disadvantages when compared to forming a corporation or limited liability company (LLC):
- Unlimited personal liability: As a sole proprietor, you are personally liable for all of your business debts and liabilities. This means that your personal assets, such as your home or car, could be at risk if your business is sued or goes into debt.
- Limited access to capital: As a sole proprietor, you may have a harder time raising capital or obtaining loans than you would if you formed a corporation or LLC. This is because investors and lenders may see sole proprietorships as less stable and less secure than separate business entities.
- Limited growth potential: As a sole proprietor, you may have limited growth potential because you are solely responsible for managing and running your business. You may also have a harder time attracting talented employees or partners, which could limit your ability to expand.
- Difficulty in transferring ownership: As a sole proprietor, it can be difficult to transfer ownership of your business. This is because your business is tied to your personal identity and reputation, and it may be hard to find someone who is willing and able to take over your business.
- Limited tax benefits: While there are some tax benefits to running a business as a sole proprietor, there are also limitations. For example, you may not be able to take advantage of certain tax deductions or credits that are available to corporations or LLCs.
In summary, while running a business as a sole proprietor has its advantages, there are also several disadvantages to consider. If you’re looking to protect your personal assets, raise capital, or expand your business, forming a corporation or LLC may be a better option for you.