Corporation Formation in Florida
A corporation may be described as an organization that exists independently from its owners. A corporation is therefore liable for its debts and financial obligations; in a corporation, the owner is not personally liable. However, there are other benefits of forming a corporation in Florida. For example, corporations enjoy an unlimited life which is not dependent on its owners. In addition to that, incorporating your business can help to enhance its credibility to existing and potential customers as well as other stakeholder such as suppliers.
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Forming a Corporation in Florida
Forming a corporation in Florida requires you to correctly fill out an Articles of Incorporation form, file it with the Florida Department of State and pay the required fee.
The corporation comes into existence once you file the Articles of Incorporation.
At minimum, Articles of Incorporation must contain the following details;
The name of the corporation
Street address of the organization’s headquarters
The purpose of the corporation
The stock structure of the corporation
Name and addresses of the incorporators
Before naming your corporation, it would be prudent to conduct a preliminary search of names on the Florida Department of State’s website to see if your desired name is available. This means that the name must be unique and must not have been registered by anyone else.
In Florida, Articles of Incorporation may be used to register several different types of corporations including;
This is a corporation that has elected a special tax status. S corporation status makes it possible for the corporation’s income to be passed through to shareholders. Subsequently, shareholders report the income/loss from the corporation in their individual tax returns.
To be eligible for S corporation status, the business must be local, have only one class of stock and have not more than 100 stockholders.
Unlike an S corporation, the C Corporation is taxed separately from its owners/stockholders.
Limited Liability Company
In an LLC, the liability of managers and managing staff in a company is limited. LLCs have numerous advantages. For example, they could benefit from pass-through taxation. This allows corporation owners to report their share of the LLC’s profit or loss on their individual tax returns. The owners then pay the tax due at an individual level. Additionally, LLCs do not have a limit on the number of members allowed. This flexibility also extends to the ability of members to structure company management and even the ability to select different models of profit distribution.