So, You Want to Start a Business?
By Lissa MacDonald, JD
You have a great idea, and your entrepreneurial mind is flowing. How Exciting! Now you want to form a business entity (e.g., Florida corporation or limited liability company) to properly manage your business and insulate from liability. Here are some ideas to think about in the process:
Pick A Name. Your business name is important because it often communicates to the world what your business is all about. Alternatively, it might be “catchy” and easy to remember. Regardless, the name needs to be available and sufficiently unique and different from existing businesses already registered in the State of Florida. Be flexible and choose a name that fits your vision and is available.
Legal Structure. Whether you want to be a corporation, limited liability company, partnership, or sole proprietor, each type of entity has ramifications on your taxes, distributions, management structure, and liability. Here is where a good attorney can provide counsel on the best option to meet your goals.
Operating Documents. During the creation and formation of your entity you will have to give thought to the organizational setup, structure, and management of your entity. This requires preparation and organization, as well as thinking about your business purpose. It is advisable to be thoughtful in these documents, considering potential pitfalls you might encounter. For example, what if you and your business partner are at an impasse? Did you include Buy-Sell provisions that will allow for a harmonious “corporate divorce”? How about the valuation of the business?
Filing With the State. While the internet has provided “access”, there’s still a significant difference in “filing” versus “filing correctly”. SPAM ALERT! Be aware there are numerous unscrupulous businesses that will reach out to you offering services and posing as a government agency – read carefully mail, email, and even text messages you receive purporting to be from the Secretary of State. In most cases, it’s just SPAM looking to prey on ignorance, and we get dozens of calls from non-clients asking for help with this.
After the Legal Entity is Created. Once the foregoing is complete, you can start doing all the things that enable you to be in business. We often assist clients in obtaining an EIN from the IRS, filing forms to choose between partnership or S Corp taxation status, registering with the Department of Revenue for the submittal of sales and use tax, among many things. Also, remember to review City, County, and State requirements for your specific business. Some types require a licensure (e.g., lawyers, realtors, contractors). Prepare your standard contracts and forms you may need in the course of running your business. Consider the insurance requirements (or best practices) for your business. Finally, if you are going to lease property, review all local building and zoning codes and restrictions when considering different locations to open your business and have the lease agreement reviewed by your attorney.
Creating a new business is an exciting endeavor! At Ledbetter Law Group…