Corporate Formation
Forming a company correctly at the outset is cheaper than restructuring it later.
What the work covers
- Entity selection for your objectives
- LLC and corporation formation
- Complete document preparation
- Corporate governance and compliance
- Business acquisitions and negotiations
- Trademark maintenance and general counsel services
Structure is protection
Most of the entity problems that reach a lawyer are not formation errors. They are the consequences of a structure chosen quickly, by default, without anyone asking what the business was going to become. The cost of unwinding that is always higher than the cost of getting it right in the first week.
Choosing between an LLC and a corporation
Entity selectionThis is the decision everything else follows from, and it is not a matter of preference.
Limited liability company
The more flexible of the two. Profits and losses pass through to the members without being taxed at entity level, the governance requirements are lighter, and the operating agreement can be written to suit almost any arrangement between the owners.
For most closely held businesses in Florida, that flexibility is the point.
Corporation
More rigid, with directors, officers, bylaws and formal meeting requirements.
That rigidity becomes an advantage when outside investment is involved. Institutional investors and venture funds expect a corporate structure, and converting later is possible but not free.
Who owns this in five years
The question worth asking at the outset is not which is better.
It is who will own this in five years, and whether anyone will be putting money in who is not already at the table.
The S corporation question
Tax electionAn S corporation is not an entity type. It is a tax election, and that distinction causes more confusion than almost anything else in this area.
Both an LLC and a corporation can elect S corporation treatment with the IRS. What the election changes is how the owner's income is characterized, splitting it between salary and distribution, which affects self employment tax.
The election is not automatically advantageous. It brings payroll obligations, a reasonable compensation requirement, and restrictions on who may hold an interest. Below a certain level of profit the additional administration costs more than the tax it saves.
It is a question best answered with an accountant and a lawyer in the same conversation, because the right answer depends on projected profit rather than on the entity you have chosen.
Forming a Florida LLC
State feesFlorida remains one of the more straightforward states in which to form a company, and one of the more popular for owners who are not resident in the United States.
| Item | Detail | Fee |
|---|---|---|
| Articles of Organization | Filed with the Florida Division of Corporations | $100 |
| Registered agent designation | Required at formation | $25 |
| Total to form | Online filings processed within a few business days | $125 |
| Annual report | Due between 1 January and 1 May each year | $138.75 |
| Late filing penalty | Applied automatically, not subject to waiver | $400 |
Every Florida LLC must maintain a registered agent with a physical Florida street address. A post office box does not satisfy this. There is no Florida state income tax on individuals, which is one of the reasons the state attracts owners from outside it.
Single member LLCs
A single member LLC is treated as a disregarded entity for federal tax purposes by default, meaning its activity is reported on the owner's return rather than separately.
Disregarded for tax does not mean disregarded for liability. The entity is still a separate legal person, and the protection it offers depends entirely on being treated as one. Separate bank accounts, proper records, and no personal use of company funds are not administrative preferences. They are what the protection rests on.
Single member companies are also the ones most often formed without an operating agreement, on the reasoning that there is nobody to agree with. That reasoning does not survive the first time the company needs to open an account, add a member, or demonstrate to a court that it was operated as a genuine entity.
The operating agreement
Florida does not require an LLC to file an operating agreement with the state, and a company will be formed without one. That is why so many exist without one, and why so many end up in dispute.
The operating agreement governs how profits are allocated, how decisions are made, what happens when a member wants out, what happens if a member dies, and how the company is valued if an interest changes hands. Where there is no agreement, the default provisions of Florida law apply, and those defaults were not written with any particular business in mind.
The time to write it is before there is a disagreement. Afterwards, every clause is negotiated by people who already know what it will be used for.
What happens after formation
Annual reportThe most common compliance failure in Florida has nothing to do with the formation itself. Two things about the annual report catch people out.
The window is fixed, not your anniversary
Every active Florida LLC files between 1 January and 1 May, in the same period, regardless of when it was formed.
The first report is due the year after formation
A company formed in December files its first report the following spring, in the same window as everyone else.
The penalty is automatic
Filing late carries a $400 penalty, applied the moment the deadline passes. It is not subject to waiver.
Then the company ceases to exist
A company that has not filed by the relevant date in September is administratively dissolved. The liability protection ends, and reinstatement is considerably more expensive than the report would have been.
Owners outside the United States
Florida does not require citizenship or residency to own a company here, and a significant share of the entities formed in Miami are held by owners based elsewhere.
What changes is not the formation, which is the same. It is everything around it. Obtaining a taxpayer identification number, opening a bank account from abroad, appointing a registered agent, understanding what the structure means for tax in both countries, and where U.S. real property is involved, how the entity interacts with withholding obligations.
We work in English, Spanish and Portuguese, and a large part of this practice involves owners in Latin America establishing a presence in Florida.
Where we act
ScopeEntity selection and formation. Complete document preparation, including operating agreements, bylaws and shareholder agreements. Corporate governance and ongoing compliance. Business acquisitions and negotiations. Trademark maintenance. And standing general counsel engagements for companies that need advice available rather than transactional.
The right structure protects personal and business assets, positions the company to raise capital or admit partners, and avoids the tax and liability problems that come from choosing a structure by default.
Tell us what you're building.
Tell us what the business does, who owns it, and where they are. We will tell you what structure it needs and what it will cost.