A breach of contract in Florida occurs when one party to the contract does not fulfill its obligations. Florida breach of contract does not have to occur between two big businesses: individuals and small businesses often find themselves in breach of contract situations. If you’ve relied on a contract and the other party breaches, you may find yourself in a tight spot. When the other party defaults, you may be scrambling to minimize your financial damages. A breach of contract in Florida can include failing to do something, like a service, or failing to pay. It can also include failing to deliver goods on time or failing to deliver the right goods. In many cases, breach of contract in Florida involves one party leaving a job unfinished, like a contractor or other service provider. If you think you have a Florida breach of contract claim, you’ll want to see an experienced contract attorney who can help you figure out what to do next. Was There a Valid Contract? Before assessing whether there was a breach, you must determine whether there was a valid contract in the first place. In Florida, a valid contract has the following essential elements: One party made an offer; The other party accepted that offer; Both parties gave consideration; There was enough certainty in the central or key contract terms; The parties had the capacity to enter the contract; and The contract terms were legal. In Florida, certain contracts must be in writing to be enforceable (under a law called the statute of frauds). The statute provides a list of contracts that must be in writing and signed by the party who would be the defendant. The list includes contracts: To answer for the debts of another; Made in consideration of marriage; Involving the transfer of interest in land; Which the parties cannot perform within one year; and Involving the sale of goods greater than $500. If you had a contract that falls under one of those categories, it must be in writing and signed by the defendant. Breach of Contract Elements Florida If you do have a valid contract, the next step is to decide if there was a breach. To show this, you’ll need to prove the following breach of contract elements in Florida: A valid contract existed (which we’ve already figured out); There was a material breach of the contract; and The breach caused you damages. To actually receive damages for a breach of contract Florida (in other words, to get the financial recovery), there are specific instructions given to the jury. These instructions require the plaintiff to prove the following: Plaintiff and defendant entered into a contract; Plaintiff did all, or substantially all, of the essential things which the contract required them to do, or the plaintiff was excused from doing those things; All conditions required by the contract for defendant’s performance had occurred; Defendant failed to do something essential which the contract required them to do, or the defendant did something which the contract prohibited them from doing, and that prohibition was essential to the contract; and The plaintiff was harmed by that failure. In layman’s terms, this means the plaintiff needs to show they fulfilled their obligations. Then, the plaintiff must show the defendant had everything they needed to fulfill their obligations, but they did not. What is a Material Breach? A material breach is a breach that goes to the essence of the contract. In other words, if the breach related to something minor like a typo or an administrative mistake or accident, that would not be a material breach. Material breach generally absolves the other party from needing to complete their contractual obligations. What Remedies Are Available? If there was a material breach of a valid contract, the next step is to figure out your remedy. In a Florida breach of contract case, there are several different types of remedies available. Rescission Rescission is a remedy that many plaintiffs seek for Florida breach of contract. It essentially undoes the contract. For example, consider a contract where one party agreed to manufacture goods, and the other party agreed to pay. If the party that agreed to manufacture the goods never does it, then the other party could ask for a rescission of the contract, so they don’t have to pay. Damages The most common type of damages available in a breach of contract action in Florida are compensatory damages. These seek to compensate the party who lost something as a result of the breach. There are two categories of compensatory damages. General damages General damages cover direct losses: what the plaintiff actually lost. For example, in a contract where the plaintiff didn’t get the goods they ordered, general damages might cover the difference between what they planned to pay and the replacement goods they needed to order from someone else. Special damages Special damages are those which flow out of the breach. They are not direct losses but losses that the plaintiff experienced because of the breach in another way. For the example above, if the plaintiff needed to order replacement goods, they might have lost profit on the original goods they could have sold. Those could be special damages. Punitive damages Punitive damages are rarely available in breach of contract actions. They punish the breaching party. The court will usually not award them unless the breaching party did something egregiously wrong, like committed fraud. Mitigating Damages Under Florida law, the non-breaching party must take reasonable steps to lessen or mitigate their damages. In the example above, if the plaintiff didn’t order replacement goods and continued to lose money, the defendant could say that they did not mitigate their damages. This could prevent them from getting any financial award in court. Breach of contract cases are about whether both parties to a contract got the thing that they bargained for. If not, the question is about how to make it up to the disadvantage party. BrewerLong Attorney Michael Long…
Are you thinking of licensing out something that you own, but aren’t sure about the various types of licensing agreements? There are a few ways to license intellectual property (or “IP”). To do so, you must first understand the different types of license agreements. Here, we’ll discuss what a license agreement is and how you can decide which is right for you. What is a licensing agreement? A licensing agreement is a legal contract by which one party that owns certain IP allows another party to use that IP. The party who owns the IP (the licensor) receives payment (a royalty) when the other party (the licensee) uses the IP. Licensing agreements can be broken down by the types of IP they license. They can be further broken down into exclusivity and duration. How to decide between types of licensing agreements 1. Decide which IP you need to license. Patent Licensing Patents cover science and innovation. Patent licensing agreements are the documents through which a patent owner allows someone else to use their patent. In practice, patent owners choose to license their patents so that they can have it manufactured and distributed widely. The individuals and businesses that create patentable material (like new inventions) aren’t usually the same parties that can easily manufacture and distribute it. It’s easier to allow someone else to handle the business side of the patent while continuing to earn royalty payments. These are generally the most complex types of license agreements because of everything involved in obtaining and maintaining a patent. Trademark Licensing Trademarks are signifiers of commercial source, namely, brand names and logos or slogans. Trademark licensing agreements allow trademark owners to let others use their IP. Most often, trademark owners license their trademarks for commercial goods, like clothing, iPhone cases, or food products. Copyright Licensing Copyright is the artwork of the IP world. Copyrights exist in, for example, works of visual art, like paintings, or movies, or songs. Copyrights also exist in characters, like Mickey Mouse. Copyright licensing agreements are often used for consumer goods, just like trademark licenses. They are also used for distributorships, such as with musical works or movies. Trade Secret Licensing Trade secrets are unique, in that they are not registered with the government. Patents, trademarks, and copyrights are most valuable when they have been registered with the federal government. Trade secrets are protected only through their secrecy. Two of the most famous examples of trade secrets are the formulas for Coca-Cola and the recipe for KFC chicken. Trade secret licensing agreements often come with non-disclosure agreements (or NDAs). NDAs state that the party receiving certain confidential information cannot share it with anyone. 2. Decide whether you’d like your license to be exclusive. Exclusive Exclusive licenses are those that create a unique relationship between the licensor and the licensee. In these types of licensing agreements, the licensor agrees that the licensee is the only one who can make use of the IP. These usually cost more for the licensee. Non-exclusive In a non-exclusive license, the licensor may be licensing the IP out to more than one licensee. These types of license agreements usually cost less for the licensee. Sole In a sole license, the licensor agrees to use just one licensee, but the licensor reserves the right to continue to use their IP, as well. 3. Decide on the duration of your license. There are also two different types of license agreement durations. Perpetual A perpetual license is one where the licensee buys the right to use the IP just once and then can use it for a lifetime. Often, these are the more expensive type of license because the licensor won’t receive ongoing royalties. Perpetual licenses can be seen most commonly in software. Term A term license is organized one of two ways: (1) the licensee can pay a one-time fee for a certain term or (2) the license can pay per use (these are traditional royalties). Term licenses are much more common across all industries. Although many people don’t think of it this way, when you pay Netflix each month, part of that fee is a license to use their proprietary digital software. According to BrewLong attorney, Ashely Brewer: “Licensing agreements are like lease agreements. A lot depends on the property involved and the relationship of the parties.” CONTACT BREWERLONG TODAY FOR YOUR LICENSING NEEDS As you can see, there are many types of licensing. An experienced IP attorney can help you figure out what type of license agreement you need, as well as what needs to go into that agreement. To schedule a consultation about your IP licensing, call our office at 407-660-2964, contact us online, or email us at email@example.com.
If you’re a limited liability company (LLC) owner with a growing business, you may be wondering how to legally expand your business to other states. Most states, like Florida, require out-of-state LLCs to register before transacting business there. Here, we’ll walk you through the steps needed to register your established LLC in the state of Florida. What is a Florida Foreign LLC? A Florida Foreign LLC is an LLC formed in another state that wishes to transact business in Florida. In this case, “foreign” refers to the company being from another state, not from another country. The process for a Florida Foreign LLC to register to do business in Florida is called foreign qualification. “Transacting business” isn’t explicitly defined in Florida state law, although the Florida statues include a partial of activities that do not constitute transacting business in the state. If you have a physical presence (like an office or store) or employees within the state, you’ll likely need to apply for foreign qualification. How can a foreign LLC register to do business in Florida? Below is a step-by-step guide to foreign qualification in Florida. 1. Order a Certificate of Existence from your state. Florida requires the foreign LLC to file a Certificate of Existence. A Certificate of Existence is a document issued by your home state that shows your LLC is in good standing. “Good standing” means that you’ve met state requirements and paid the necessary fees. It’s a good idea to order your Certificate of Existence as soon as you decide to file for foreign qualification. 2. Make sure you meet Florida’s registration requirements. Florida requires certain items for their foreign LLCs. The requirements may be similar to the ones in your state. The name of the Florida Foreign LLC must be unique. It must contain the designation “Limited Liability Company,” “L.L.C.,” or “LLC.” The LLC must also appoint a registered agent, who can accept service of process. Additional requirements for the qualification include: The name and contact information of the individual responsible for the LLC application The name of the LLC in your home state The state where you initially organized your LLC If applicable, your Federal Employer Identification Number/Employer Identification Number (FEI/EIN) The physical address of your LLC The mailing address of your LLC, if it’s different The name, address, and title of all the members, managers, and authorized persons of the LLC 3. Fill out an Application for Authorization to Transact Business in Florida. Once you’ve gathered all of the information and made sure you’ve met the requirements, the next step is to fill out the application. This is called the Application by Foreign Limited Liability Company for Authorization to Transact Business in Florida. It is available online. It can be filled out online and printed, or printed and then filled out in pen. Finally, someone with authority for the LLC must sign the application, along with the registered agent. 4. File the application, along with the required fee, and a cover letter. Once filled out, you should mail the application, a cover letter, the Certificate of Existence, and the required fee to: Division of Corporations Registration Section P.O. Box 6327 Tallahassee, FL 32314 The basic fee is $125, which includes the filing fee and the designation of a registered agent. You can also get a certified copy or a Certificate of Status for additional fees. 5. Once registered, file an Annual Report each year before May 1. Once the LLC is registered in Florida, make sure you file an annual report each year. The first one is not due until the year after you’ve registered in Florida. After that, you must pay the $138.75 fee each year, along with filing the annual report, before May 1. If you don’t, you may lose your “active” status in Florida. According to BrewerLong attorney, Trevor Brewer: “Out-of-state companies that do business in Florida may face a big surprise if they are sued. Either pay all the annual report fees and late fees that they were required to pay or be prohibited from adequately defending itself in court.” Follow these steps to get started conducting business in Florida. If you’re looking for a little assistance, an experienced Florida attorney can help make sure your LLC is all set up and ready to go. CONTACT BREWERLONG FOR YOUR FLORIDA FOREIGN LLC QUALIFICATION To get some help registering your foreign LLC in Florida, call our office at 407-660-2964, contact us online, or email us at firstname.lastname@example.org.
If you’re like many Florida business owners, you may view retirement with both excitement and misgivings. Even as you look forward to having more time to enjoy favorite activities, the idea of moving on from your livelihood can be anxiety-inducing. One option that allows you to step away and still experience the benefits of retirement is bringing family into the picture. The formal requirements under the Florida Business Corporation Act aren’t too complicated, but there’s a bigger picture to consider when you transfer business ownership to a family member. As soon as you begin seriously thinking about retiring, time is of the essence to start planning. You’re in a better position to leave on your own terms, maintain control over the process, and reap the benefits of a steady retirement income. You should discuss the specifics with an experienced Florida business law attorney, especially three key topics that may guide your decision making. Your Company’s Value There are numerous factors to consider about your own retirement situation, but you may also have concerns about your company’s well-being and longevity in moving forward without you. For many closely held companies, there’s significant value attached to the people that built them. When your own unique, personal input is an asset to the business, you need to assess the extent to which the company can survive after you sell it – or whether it can maintain a good proportion of its value by transferring business ownership to a family member. The analysis starts with an unofficial business valuation, typically a basic review of assets, expenses, accounts receivable, and debts, along with the value of your personal reputation and good will. Then, you’d determine whether the total dollar figure could be enough for a comfortable retirement, exclusive of other savings, pensions, and investment income. If you’re convinced that your business would perform well without you at the helm, you need to work out an official business valuation through generally accepted accounting standards. Not only is this necessary for making a decision on transfer or sale, but also for the tax implications in evaluating your expected retirement income. Your Individual Retirement Needs Retirement is a major life transition for anyone, and even more so for someone who owns a business. When considering your own needs for income, you must assess how far your retirement will go for a wide range of expenses, such as: Your basic needs, including your mortgage, utilities Health insurance and medical costs; Car leases; Services you’re used to gaining through the company, such as tax preparation, and club memberships; and, Other expenses that you’ll now be responsible for covering yourself. You must also consider how to apportion your retirement income to cover these costs, especially the amount that comes from transferring your business as compared to your income from investments and other assets. For this reason, as early on as possible in your planning, you should be contributing to a retirement fund that will suit your needs – aside from what you’d make through a sale of your business or transfer to a family member. Keep in mind that you could make arrangements to stay on and play a role with your company when you transfer ownership to a close relative. Many former business owners can serve on the board of directors or in a consultative role, enabling them to make an income without taking full control of operations. You can make an important contribution if you’re serving and maintaining relationships with customers who have been dealing with you directly for years. Options for Structuring the Transfer If you’re leaning toward transferring ownership of your business to family members or trusted employees – as opposed to a third party – there are multiple options and structures to consider. You should discuss the specific pros and cons with a business law attorney, but you might look into: Gift Transfer: You could transfer ownership to the other party as a gift, with the caveat that you’ll earn income form the new owners. As of 2017, the Internal Revenue Code allows you to claim an individual gift exemption of $10 million – or $20 million if you execute the deal with a spouse. Because the laws allow for annual adjustments for inflation, the exemption is $11.4 million and $22.8 million for 2019, respectively. The amounts increase for the next few years. This means you could leverage the business transfer as a gift without adverse tax implications, in some cases. Once the business is no longer part of your estate upon your death, you won’t incur tax liability when the company expands Financed Sale: You may opt to act as a lender in transferring the business to a family member, and there are many ways to structure the transaction. Through a promissory note, you can obtain payments directly from the buyer based upon an amortized schedule – or installment payments followed by a balloon. During the pendency of the arrangement, you’ll make a steady, regular income to maintain a comfortable retirement lifestyle. Partial Sale & Lease Back: If your company has considerable holdings in real estate, a building, or other property, you could sell the business – but retain ownership over these assets. Then, you can rent them back to your family members as new owners of the company. There are tax advantages, but the key benefit is that you can fund your retirement through the lease payments. Keep in mind that you need to include specific provisions when drafting the documents to transfer your business, as disputes can arise when family members are caught off-guard by a lease relationship. “Succession planning, particularly where it involves transferring ownership or operation of a business to children or other family members, must start with the question: ‘What is the best interest of each party?’ Sometimes its easier to jump ahead to talking about available structures before having complete understanding and agreement on the goals.” BrewerLong Attorney Trevor Brewer Contact an Orlando, FL Business Law Attorney for Help…
If you’re new to commercial leasing, you’re probably quite amazed by the highly technical, meticulous nature of the contract. Leases for these spaces are very different from residential agreements, especially since landlords may require you to pay an amount in addition to your actual rent. This payment often covers taxes, maintenance, and insurance (TMI). When you find out that you’re obligated to pay, it could have a significant effect on whether the space is affordable. A Florida contract attorney can explain the details, but it’s helpful to review some answers to frequently asked questions about TMI in a commercial lease. What’s included in TMI? In most cases, the bulk of your TMI will go toward your landlord’s property taxes and some insurance costs. Beyond these amounts, you might think of TMI as including many of the same maintenance costs that you’d pay as a homeowner in an HOA. Examples include: Landscaping, waste removal, and cleaning of common areas; Paying for building management costs; Administrative fees; and, Ongoing repairs and maintenance for the roof, HVAC, plumbing, and related costs. “The division of maintenance obligations is one of the most significant items requiring negotiation and attention to specifics.” BrewerLong Attorney Ashley V. Brewer In addition, Florida imposes sales tax on leases of commercial property, so some of these amounts are also built-in to TMI. Why is TMI separate from the base rent? It’s a common practice for landlords to present their monthly rent in terms of a price per square foot, so tenants like you can compare different spaces. Companies separate out TMI in leases because the tenants are the actually using the property and taking advantage of the features that additional rent supports financially – usually in the form of more customer traffic due to the enhanced appearance of the space. How does the landlord calculate TMI? Usually, your landlord will add up the total costs for annual taxes, insurance, and maintenance, and then divide it by the total square feet of the building. From there, the company multiplies the per square price by the number of square feet in your individual space. The total is the amount of TMI that you’ll be responsible for paying, though the formula may vary depending on your circumstances. Does TMI fluctuate over time? Because property taxes make up a good proportion of the total TMI amount, you can expect your additional rent payments to increase or decrease. As key systems age, including the roof, HVAC, and plumbing, the costs may also fluctuate. Can I negotiate TMI? It can be challenging for a prospective tenant to negotiate changes to TMI. Landlords know that their tenants talk, and they don’t want to create conflict by offering one business a lower TMI as compared to others. Discuss Commercial Leases with an Orlando, FL Contract Lawyer If you have additional questions about TMI in a commercial lease, please contact BrewerLong. Our team advises business owners through Central Florida, including Orlando, Sanford, and Winter Park. We can schedule a free consultation to provide more information on commercial leasing issues.
When you’re buying or selling a business, some of your main considerations will be price, the structure of the transactions, complying with transfer regulations established by the Florida Division of Corporations, and related details. One key issue that may not cross your mind is an exclusivity period. This prohibits a seller from dealing with any other potential buyers while the transaction is still pending. To determine whether you’d want one, you should understand what exclusivity means, learn about the key clauses, and consult with a Florida business law attorney about the pros and cons. Overview of Exclusivity Clauses in Business Transactions An exclusivity provision defines a length of time, typically 1-2 months, where a seller cannot deal with any party other than the prospective buyer regarding the sale of the business. Exclusivity covers a wide range of activities involving a transaction, including: Advertising the business as being for sale; Entertaining an offer made by another party; Entering into negotiations regarding the sale of the business; or, Accepting an offer. The specific terms, including the duration and itemized list of prohibited activities, will be included in the exclusivity section of the letter of intent executed by the buyer and seller. Purpose of an Exclusivity Period These provisions are essential to protect both buyer and seller in a transaction involving sale of a business. In generally, the transaction doesn’t proceed in the same fashion as the purchase of a home or car. There are formalities, due diligence periods, and other tasks that cannot be accomplished overnight. That means exclusivity periods offer advantages to both parties to the transaction. Buyer Benefits: As a potential buyer, you need time to go through the books of the target business and conduct your own assessment of whether the deal is fair. Reviewing the essential information takes time, and you don’t want to feel rushed. Seller Benefits: If you’re on the other side of the transaction, you don’t want to go through the effort and time in selling your business – only to have the buyer proceed lackadaisically or dwell on minute details. After all, even though you have a letter of intent, you don’t have a complete agreement. If the buyer ultimately backs out, you’ll have to start the entire process from scratch, which could affect your business value and bottom line. For this reason, sellers have power to negotiate a reasonable amount of time for the exclusivity period. “A carefully drafted exclusivity provision—as part of a purchase offer, Term Sheet, or Letter of Intent—is key to the negotiation process. It gives the parties time and space to work out the details of a transaction, and even decide whether a transaction can happen, without either party risking terrible consequences.” BrewerLong Attorney Trevor Brewer Key Provisions in an Exclusivity Agreement Though they’re usually part of a larger document as the letter of intent, there are several key clauses that comprise the exclusivity arrangement between a buyer and seller. Some of the more important provisions include: No Shop Provisions: The crux of an exclusivity agreement is the seller’s promise to not solicit, negotiate, or enter into agreements regarding alternative transactions with other prospective buyers. It’s also possible to include the requirement that the seller end any existing sale discussions with third parties. Exclusivity Period: The start and end dates are the key details for this section of the agreement. Usually, the period begins when the buyer has a meaningful indication of interest, often by signing a letter of intent. However, there are other documents that can contain exclusivity clauses, such as a term sheet or offer for sale. The end of the exclusivity is typically marked by both parties’ signatures on an acquisition contract or bill of sale. Obviously, a buyer will want a longer period to address due diligence, but a seller may want to negotiate a shorter duration – such as 1-3 weeks. Termination: Both parties should give themselves an “out” in case the transaction doesn’t measure up to expectations. As the buyer, you may uncover issues that affect the sale price or intentions for the business. The seller could negotiate terms that terminate the exclusivity period if the buyer isn’t making progress toward completing the transaction. Duty of Good Faith: Any purchase agreement should require parties to act in good faith throughout the exclusivity period. A failure to include such terms – or refusal to sign – demonstrates that either the buyer or seller isn’t committed to completing the deal. Consult with an Orlando, FL Business Law Attorney About Exclusivity Issues For more information on how exclusivity periods work in the sale or purchase of a business, please contact BrewerLong. You can set up a free appointment by calling 407.660.2964 or visiting us online. Our team serves business clients in Orlando, Sanford, and throughout Central Florida, and we’re happy to advise you on the key legal issues.
Whatever the reason behind your decision to dissolve your business, it’s important to understand that it’s not as easy as just closing your business doors and moving on. There are multiple requirements under the Florida Business Corporation Act, and noncompliance can lead to serious legal consequences. Though many business owners were fully prepared to start up their company, fewer know exactly how to dissolve a corporation in Florida. The details will vary depending on the nature and where your organization stands within a typical corporate lifecycle, so it’s wise to trust a Florida business law attorney for assistance. A general overview of the steps can also help you learn what to expect. Determine Dissolution Requirements If you never issued shares to stakeholders and haven’t launched operations, your plan for terminating your business is relatively straightforward. You need to complete the necessary forms to dissolve. The paperwork is available online, but you can’t submit your documents through the Division of Corporations website. Instead, you might have to type your information into the relevant fields, and then print everything out and send it through US mail. For corporations that have issued shares and accepted funds or other items of value for an ownership interest, the requirements are different. Notify Stakeholders If people have invested in your company by purchasing shares of stock, they are owners. You couldn’t sell or otherwise cease operations without their consent, so you’ll need to notify them that you intend to dissolve your corporation. Your Articles of Incorporation and Bylaws contain the details on how to call a meeting for purposes of terminating your company, so you’ll need to strictly comply with these rules. During the meeting, members of your board of directors need to officially bring up the issue of dissolution for a vote and recommend it to the shareholders. Then, you must get consent from a majority of the shareholders to dissolve. In some situations involving small businesses, members of the board of directors will also be shareholders. That could make the process easier; however, it’s possible that not all stakeholders agree. Alternatively, there may be many shareholders in a larger company, further complicated the process. “Corporate dissolution should not be seen as the first resort in solving disputes among business owners, managers, and investors. The ideal situation is for parties to engage in a negotiated settlement of their difference, so that the corporation can continue to survive.” BrewerLong Attorney Michael Long Fill Out Dissolution Forms Once you have agreement from all shareholders, you’re ready to fill out the necessary paperwork to wrap up your business. The form is Articles of Dissolution and, though it may seem easy, you need to fully understand the details. You must include: The full, legal corporate name of your company as registered with the Division of Corporations; The date that you originally filed your Articles of Incorporation; The date that you intend for your corporation’s dissolution to officially become effective, which must be within the next 90 days after filing; and, Some details on how your company voted to dissolve, which would typically be a corporate resolution. If you didn’t initiate operations and never issued shares, you must supply the name and relevant dates as mentioned above. In addition, you must include an attestation, i.e., a sworn statement that: You have not issued any shares; Your company didn’t conduct any business; Your corporation has no outstanding debts or legal obligations; and, Members of the board of directors or the original incorporators agreed to dissolution. Complete a Notice of Dissolution Though not mandatory to dissolve your company, you may opt to prepare this notice. The document officially states that your business has ceased, which can be useful in dealing with any debts or legal obligations. If creditors contact you seeking payment, you can use this form to establish the requirements necessary to make their claims and get payment. The document also acts as official notice that creditors cannot bring any new claims for debts you’ve resolved. Submit Materials Along with Fees The final step in how to dissolve a corporation in Florida is sending everything into the Division of Corporations. You should include a cover letter that itemizes everything that you’re including in the packet. It’s also necessary to provide a check, along with all necessary fees – which will vary depending on the method of dissolution. Get Legal Help from an Orlando, FL Business Law Attorney At BrewerLong, our lawyers have decades of combined experience advising business clients throughout Central Florida. We can explain how to dissolve a corporation in Florida, and we’re prepared to help you navigate the process. To schedule a free consultation with a member of our team, please call 407.660.2964 or fill out an online contact form.
If you’ve been in the business world for some time, you’re probably familiar with the different types of entities that you can form through the Florida Division of Corporations. Limited Liability Companies (LLC) have become popular in recent years because they allow you to protect your individual interests and can be structured to optimize tax treatment. Certain individuals holding a professional license or other credentials through the state may be interested in a specific type of entity, the Professional Limited Liability Company (PLLC). There are very specific rules regarding a Florida PLLC. You should trust a Florida business law attorney regarding the specifics, but some answers to common questions may be helpful. What is a PLLC? This type of business is similar to an LLC in the sense that there are members who own and run the business. However, a PLLC must be organized and operated by individuals who hold a proper Florida license in the associated profession. For instance, only the following individuals can be members of a PLLC: Physicians, dentists, and other medical specialties; Certified public accountants; Attorneys; Certain types of architects and engineers; and, Others designated by law. Beyond this requirement, there are other similarities between a PLLC and LLC. All members can play a role in day-to-day operations, decision making, and other management tasks. They can also share in the profits and losses, without the constraints of forming a corporation. “PLLCs are somewhat unique to the State of Florida. BrewerLong is a PLLC, because it best reflects that this is a company that is owned and operated by licensed attorneys.” Trevor Brewer Are there any restrictions on “limited” liability? The attraction of limited liability entities, including corporations, LLCs, and PLLCs, is that you can insulate your personal interests from debts and obligations of the company. Creditors cannot touch your own assets for debts owed by the PLLC and claimants cannot reach your property due to misconduct by other members. Still, “limited” doesn’t mean complete elimination of liability. You cannot protect your own assets from: Liabilities related to your own professional misconduct; and, Personal guarantees you’ve executed on behalf of the PLLC for loans or other financing. What are some of the legal requirements for a Florida PLLC? Beyond being a licensed professional, there are some basic compliance issues. You must file the proper paperwork to organize your company, and it needs to bear a name that includes some derivation of “PLLC” in the title. Plus: Your PLLC cannot be involved in any conduct other than the services that you’re professionally licensed to provide. There’s an exception for investments that are directly related to business operations. ALL members must hold a license in the relevant profession. Business managers, investors, “silent” members, and others cannot have an ownership interest unless they also hold the proper credentials through the State of Florida. Current stakeholders cannot transfer their ownership interest to any person who doesn’t have a license to practice in the professional services offered by the PLLC. Do I need to prepare an Operating Agreement for a PLLC in Florida? An operating agreement is essentially a blueprint for your business, defining the organizational rules, distribution of profits and losses, structure for decision making, and many other issues. You’re not required to execute an operating agreement when forming a PLLC, but there are many advantages. Generally, preparing one is a benefit because it reduces the likelihood of disputes and disruptions in company operations. How do I deal with taxes and insurance? For tax purposes, a PLLC is a “pass-through” company, which means that tax liability goes to the individual members instead of the entity itself. Stakeholders report income and losses on their own tax returns, much like an S-corporation. The PLLC does file an informational return with the IRS, but there’s no tax liability for the entity. All individual members of a PLLC should carry individual professional insurance policies to cover their own losses in the event of malpractice. The company and other members aren’t liable for such misconduct, as described above. With a proper insurance policy and coverage in place, you’re protected against claims stemming from your professional services. Discuss PLLCs with a Knowledgeable Orlando, FL Business Law Attorney After reviewing the above, you may have additional questions about PLLCs in Florida. Our team at Brewer Long Business Law can provide the answers you seek, so please call 407.660.2964 or visit us online to schedule a free consultation. We can provide more detail after reviewing the nature of your business. Our office represents clients throughout the Orlando area and Central Florida in a wide range of business law matters, including business entities and formation.
The basic definition of a divestiture is selling off business interests and assets, and closing down the enterprise upon conclusion of the process. However, there’s a lot more you need to understand if you’re considering this type of transaction or its counterpart – an acquisition. The Florida Business Corporation Act covers the scenario generally, but there are complicated financial, legal, and organizational considerations that you won’t find in the statute. These issues may affect your interests before, during, and after the transaction is complete, so it’s smart to retain a Florida mergers and acquisitions attorney from the start. You can become familiar with some of the basic principles about acquisitions and divestitures by reviewing some important information. Key Definitions To expand upon the basic terminology, a divestiture is a complete disposition of a business entity’s presence, assets, liabilities, debts, and other interests. The transaction may be through selling the business, but divestiture can also occur because of an exchange of real estate, company property, and stock. If the organization qualifies under the US Bankruptcy Code, the court may also approve of a divestment through liquidation or restructuring proceedings. Depending on the background, it’s possible to complete either a full or partial disposition. For instance, a company may consider divestiture where: Trademarks, copyright, or patents have expired; It’s selling intellectual property to another organization; Separate divisions of the company are acquired through different mergers and/or acquisitions; A court orders divestiture to cover a judgment or other legal liabilities; and, Under many other circumstances. Reasons a Divestiture May Work for Your Needs Business owners have multiple grounds for wanting to divest their interests in a piece of property, a component of the organization, or the entire enterprise. You may want to consider divestment as an option if you’re seeking to: Eliminate redundancies in your business, where a unit isn’t turning a reasonable profit; Increase cash flow for the company without incurring loans or bringing in new investors; Make your business look better on paper, especially where you’re looking to sell and increase the fair market value; or, Avoid adverse consequences of bankruptcy or terminating the company. In addition, divestiture may not be an option when it’s the subject of a court order or a finding by an administrative agency. “Instead of starting a new business from scratch, sometimes the best decision is to purchase an existing business. With the right structure, a buyer can purchase the seller’s whole business or just the parts that are attractive to the buyer.” Trevor Brewer Relationship Between Acquisitions and Divestitures For every business that’s looking to optimize operations through divestment, there’s another company actively seeking out opportunities to advance their interests. For this reason, divestitures are often closely associated with acquisitions by another entity. However, based upon the reasons above, extra caution is essential if you’re on the acquiring side. Regardless of whether your interests are in acquisition or divestiture, a thorough business valuation is essential. There are multiple approaches, including those that take into account fair market value, historical value, income, asset value, and initial purchase prices. You should trust legal counsel and financial experts to advise you on the right structure, but options include: A partial sale of units, a subsidiary, or other interests; Spinning off and dividing up various business units into a separate company; Splitting the company up into multiple, separate entities – which divests the parent company and operations cease; or, An approach that involves selling a subsidiary or business division and offering it up through an IPO. Speak to an Orlando, FL Mergers and Acquisitions Attorney for Free If you’d like more information about acquisitions and divestitures in Florida, please contact Brewer Long Business Law to set up a no-cost consultation. You can reach our Maitland, FL office by calling 407.660.2964 orvisiting our firm website. Our experienced lawyers handle complex business transactions for clients throughout Central Florida, including Orlando, Deltona, Apopka, and Lake Buena Vista.
If you’re seeking to buy or sell an existing business entity in Florida, there’s a good chance you want to accomplish this goal through either a merger or acquisition. The route you take depends upon a number of factors, and one of the most important is what’s best for your needs and those of your company. Though the Florida Business Corporation Act’s section on merger goes into great detail on the legal requirements, it doesn’t offer any guidance that’s useful for your specific situation. Because of the complicated issues involved with these transactions, it’s wise to rely on a Florida mergers and acquisitions attorney for assistance throughout the process. You might also find it useful to review six important things to know about small business mergers and acquisitions. “I tell my clients to focus on the end results they want to see in a business transaction. It’s my job to figure out the best transaction structure to accomplish my client’s goals.” Trevor Brewer 1. Mergers and acquisitions are different structures: A merger integrates two companies into a single, new business entity, combining the assets, liabilities, and some executives and personnel of each entity. Though there are creative ways to structure the transaction, a true merger is rare because of the challenges faced by separate organizations that want to become one. In an acquisition, a target company is absorbed by the entity that’s purchasing it, usually through a stock or asset acquisition. 2. You must determine the right structure for your needs: Based upon the differences between the two, you can see how you’ll need to make the right choice between a merger and an acquisition – regardless of whether you’re the target or the acquiring organization. If you want to continue operations alongside another business, you’d opt for a merger. When an acquisition makes more sense, you must then determine whether a stock purchase, asset acquisition, or blend of the two would be appropriate. 3. A business valuation is essential: Financial considerations are a key motivation when considering a merger or acquisition, so you’ll need to arrange for a business valuation to determine what the other company is worth. A CPA or other business appraisal professional may take different approaches in conducting such an assessment, so you should agree in advance on the basis you want to use. 4. There are certain requirements for the Merger or Acquisition Agreement: There are some mandates addressed by law, while others are just smart to include when you’re involved in a merger or acquisition transaction. Obvious issues include the purchase price and how it will be paid. However, some additional key points you should include are: The business valuation method, as described above; How debts, contracts, and liabilities are distributed; Employment issues involving current employees and executives; What happens to intellectual property; Tax matters; Representations and warranties regarding the business; Insurance; Liens and third-party contracts; and, Much more, depending on your circumstances. 5. You may need to obtain multiple approvals: Regardless of what form the transaction takes, you must at least review the possibility that you’ll need approvals for a merger or acquisition. For instance: Stockholders may need to consent to any arrangement that affects their holdings. In some situations, you may be required to obtain approvals for every shareholder in accordance with their ownership interests. For some transactions, you’ll need to get approvals from the Board of Directors. In the case of third-party contracts, including agreements involving key employees, you must assess the documents to determine how the merger or acquisition could be an issue. 6. There are certain tasks involved with transferring business ownership Once you complete a merger or acquisition, you must file the appropriate documents in the State of Florida. You’ll also need to review any changes regarding tax issues with the IRS. Other administrative tasks include changing the taxpayer ID number for business bank accounts, changing title and ownership on company assets. Any insurance policies should be adjusted to include the name of the entity that results from the transaction, and you must check to ensure all business licenses reflect the new arrangement. Consult with a Mergers and Acquisitions Lawyer in Orlando, FL Today Of course, there are many additional matters you need to know about small business mergers and acquisitions in Florida, so it’s important to work with skilled legal counsel from the earliest stages. You can trust our attorneys at Brewer Long Business Law to explain the relevant legal issues and protect your interests from start to finish in this type of transaction. To learn more, please call 407.660.2964 or go online to schedule a free consultation. Our team serves business clients throughout Central Florida and the Orlando area out of our Maitland, FL office.