What types of business entities does Florida recognize?

What types of business entities does Florida recognize?

| May 11, 2020 | Firm News |

If you want to start a business in Florida, one of the first steps is figuring out how to structure it. There are numerous business entity options in Florida, and each one has unique advantages and requirements. 

The type of entity you choose may depend on whether you want to work by yourself or share the business with others. The Florida Department of State’s website provides an overview of all the different types of business entities. 

Options for small businesses 

According to the Florida DOS, a sole proprietorship is the simplest business structure and the one that is most common for individuals starting out. This structure defines an unincorporated business run by one person where there is no legal separation between that individual and the business. The owner is liable for all business debts and reports income on his or her personal taxes. 

If a person wants to operate a business alone but have more protection against personal liability, he or she may create a limited liability company. In an LLC, there are no requirements for shareholders or directors. An LLC limits the personal liability of the business owner. 

Business structure for large companies 

Individuals who want to go into business with other people may consider forming a partnership. There are two partnership options: general and limited. A general partnership simply refers to an arrangement where two or more people agree to divide the responsibilities and liabilities of the business equally. In a limited partnership, there are both general and limited partners. The limited partners are not liable for the actions or debts of the business or the general partners. 

Large businesses are often corporations. A corporation is a separate legal entity, and it generally has shareholders and directors. The corporation itself pays taxes and is responsible for legal actions, limiting the liability of the owners.