For many years people have owned an operated their businesses as a Florida corporation which elects to be taxed under sub chapter S of the Internal Revenue Code. This is commonly known as an "S-Corporation or S-Corp".
While an S-Corp has the advantage of not paying any tax at the entity level it does have disadvantages because of the severe restrictions on the eligibility of shareholders and classes of stock which can be issued.
A limited liability company is another form of business entity available in Florida. It is commonly known as an "LLC". An LLC provides its owners the same level of protection from the liabilities of the business that a corporation does. Typically an LLC will elect to be taxes as a Partnership for Federal Tax purposes.
An LLC taxed as a Partnership has several advantages over a typical S-Corp including:
An LLC can be structured in almost any way the owners desire. While the operations and business structure of corporations are largely controlled by statutes the owners of an LLC can do it their own way. An LLC can be structured like a partnership wherein all owners have equal control and share the profits equally. Alternatively an LLC can have both voting and non voting members. This is especially attractive to parents who want to transfer the value of the business to their children while still controlling the business during their own lifetime.
A single member LLC is an LLC with only one owner, similar to a sole proprietorship. A single member LLC is very simple to form and operate. A single member LLC can elect to be a disregarded entity for IRS purposes and is not even required to file its own separate tax return. All of the income and expenses of the single member LLC are simply reported on the form 1040 tax return of the owner. This can save time and money.
Florida law allows a corporation to "Convert" into a LLC. Upon conversion the new LLC will simply step into the shoes of the former corporation and for all purposes it will be the same legal entity as before the conversion. Upon conversion legal title to all assets and property will automatically vest in the new LLC and all liabilities, debts and claims against the old corporation automatically attach and follow over to the new LLC. All of the former shareholders of the corporation automatically become owners/members of the new LLC in the exact same percentages (unless the shareholders agree otherwise).
Conversion into an LLC is very similar to a merger from a legal standpoint. It can be quite complicated once a corporation has established itself with business operations, assets, and numerous shareholders. However, if the corporation is new or has very few shareholders conversion can be relatively simple.
Our attorneys will complete the following steps are required to convert a corporation to a LLC under Florida law:
A. A written Plan of Conversion is drafted, the plan must be in compliance and contain all of the provisions required by Section 607.1112 of the Florida Business Corporation Act, including the terms and conditions of the conversion, including the manner and basis of converting the shares, obligations, or other securities, or rights to acquire shares, obligations, or other securities, of the domestic corporation into the partnership interests, limited liability company interests, obligations, or other securities of the other business entity, including any rights to acquire any such interests, obligations, or other securities, or, in whole or in part, into cash or other consideration;
B. The Directors and Shareholders adopt and approve the plan and authorize the conversion;
C. A Certificate of Conversion and LLC Articles of Organization are filed with the division of Corporations and appropriate filing fees are paid.
D. Have your accountant notify the IRS of the conversion and elect partnership tax status.
Then you are finished and you continue on as a LLC enjoying all the LLC benefits.
Florida law requires that certain formalities be followed in order for you to enjoy the limited liability protection afforded the owners of a Limited Liability Company (LLC). In addition following these formalities helps prevent disputes and allows owners to flush out the details of their business relationship. The following items must be completed by our attorneys:
Florida law requires that certain formalities be followed in order for you to enjoy the limited liability protection afforded the owners of a Corporation. In addition following these formalities helps prevent disputes and allows owners to flush out the details of their business relationship. The following items must be completed by our attorneys:
In general the answer is no. In order to "own" the exclusive national rights to use a name, slogan, or trademark in business or commerce you must file for a Federal Trade name or Federal Trademark.
In general the answer is no. In order to "own" the exclusive national rights to use a name, slogan, or trademark in business or commerce you must file for a Federal Trade name or Federal Trademark. A Fictitious Name Registration simply allows you to operate your business under a name different than the name you filed under your Articles of Incorporation or Articles of Organization.