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Choosing the right structure for your business depends on your goals. When selecting an entity type, consider the formation requirements, liability protection, tax implications, and how you envision business operations and management.  If you need help deciding what type of business structure is best for your organization, contact a business attorney.  Limited Liability Company (LLC) An LLC is a hybrid business structure that has some characteristics of a corporation and a partnership. These entities are favorable among small to medium-sized businesses because they are easy to form and flexible to manage and offer the liability protection of a big corporation.  Formation To form an LLC, file Articles of Organization with the Florida Department of State and pay a one-time filing fee of $125. Each year you must file an Annual Report and pay a fee to maintain good standing.  Liability Protection The hallmark of an LLC is the limited liability protection for its owners (also called members) from the liabilities of the LLC and protection of the LLC from the liabilities of the member. An LLC is a separate legal entity from its members. The members’ personal assets are protected if the LLC is sued or files for bankruptcy, and their liability is limited to what they invest into the LLC. Also, creditors of a member cannot take control of a member’s interest in a multi-member LLC. However, the Florida Supreme Court has ruled that single-member LLCs may not be completely insulated from the member’s liability.   Taxation  LLCs enjoy the benefit of pass-through taxation, like a partnership. This means that the LLC’s income passes through to the members and they only pay income tax once at the individual level. The members must include all business income and losses on their personal income tax return. On the other hand, corporations by default are subject to double taxation, where the corporation pays income taxes at the corporate level and again at the individual level when it distributes dividends to shareholders.  You can elect to have your LLC taxed as either a C Corp or an S Corp. If your LLC is taxed as a C Corp, you will not pay the self-employment tax, but the business income is subject to double taxation. If you choose to be taxed as an S Corp, all profits and losses will still flow through to the members, but the profits are not subject to self-employment tax and additional distributions of profits are taxed as passive income.  Another important aspect of taxation is the treatment of members who work for the LLC or are involved in management. By default, the IRS considers these members to be self-employed business owners, and all amounts paid to them are subject to self-employment tax. Self-employment tax is in addition to federal income tax and is made up of 12.4% Social Security tax and 2.9% Medicare tax. However, you can deduct half of the self-employment tax as a business expense. This self-employment tax treatment can be avoided by making an S Corp election.  Ownership, Management, and Profit/Loss Sharing LLCs have no ownership restrictions in terms of who can own the LLC or how many members can have an interest in the LLC.  There are two types of management structures in an LLC. One is member-managed where all members participate in the decision-making. The other management structure is manager-managed where a manager handles the business affairs, much like a corporate director, and the members are akin to shareholders and have limited discretion over management.  Members can choose how to share profits and losses. They do not need to correlate to the percentage of ownership.  Advantages and Disadvantages LLCs are advantageous in many ways. These business structures have simple formation and maintenance requirements. They provide members with liability protection and great flexibility in terms of ownership and management. By default, LLCs are not subject to double taxation but can elect their own tax treatment. Also, the LLC passes losses through to its members, which can help reduce individual tax liability.  In terms of disadvantages, all LLC profits are subject to self-employment tax. Ownership interests in an LLC are not as freely transferable as, for example, stocks in a corporation. To some, LLCs may not appear as “official” as a corporation, which may be important if seeking investors. Lastly, if your LLC is in a unique situation that the Florida Revised Limited Liability Company Act does not address, you will find little guidance or protection in Florida’s case law because LLCs are still relatively new entities.  C Corporation  A C Corp is an independent legal entity that is taxed separately from its shareholders under Chapter C of the Internal Revenue Code (IRC). Formation There are strict legal requirements when forming a C Corp in Florida. For example, a Florida C Corp must have at least one director, appoint officers, and hold an organizational meeting. Liability Protection Like LLCs, C Corps insulate their shareholders from liability. This is one of the main reasons business owners form corporations, whether LLCs or C Corps—because they want to protect their personal assets.  However, unlike LLCs, C Corps are not protected from control by their owners’ creditors. Taxation A C Corp’s income is subject to double taxation. This means that the corporation’s profits are subject to corporate income tax and then subject to personal income tax when the shareholders receive dividends. However, C Corps can avoid this double taxation by electing S Corp status. Ownership, Management, and Profit/Loss Sharing C Corps, just like LLCs, have no restrictions on the number of owners/shareholders or the type of owners/shareholders.  The management of a C Corp is not as flexible as with an LLC. A corporation must appoint a board of directors to manage business affairs. There are also extensive management requirements for C Corps, such as holding annual shareholder meetings and board of directors meetings. Shareholders of C Corps have financial rights (i.e. rights to profits) based on their stock ownership. Unlike an LLC, where certain members can receive larger distributions of…

If you have a business mindset and a passion for creating programs or services that impact and change lives, starting a nonprofit organization in Florida might be a good option for you. Nonprofit organizations are generally formed for charitable, religious, literary, educational, or scientific purposes. This type of business is also called a 501(c)3 and is eligible for federal and state tax exemptions.  If you are thinking about starting a nonprofit in Florida, you should talk to a business lawyer to ensure you are complying with all of the requirements.  Considerations Before Starting a Nonprofit in Florida There are a lot of factors to consider before you start looking into how to start a nonprofit in Florida. Though you may be passionate about your idea, it is important to look around at what is already being done in your community to determine if there is a need. In some cases, you may be able to use your skillset to improve an existing Florida nonprofit. You do not want to be competing against a nonprofit that’s trying to achieve your same goal.  It is important to formulate a mission statement for your nonprofit. This helps guide your purpose above all else and can help you determine the growth of the organization. Along this same line of thinking, you should have a clear “elevator pitch” for what your nonprofit will do. When starting a nonprofit organization in Florida, you should be able to concisely articulate the purpose and benefits of the organization. Not only will this help you when you start a nonprofit in Florida, but it will also help you attract support.  501(c)3 Florida Statistics According to a 2020 report from the Florida Nonprofit Alliance, the state is home to 4.5 nonprofits for every 1,000 residents. That may seem like a large number, but this places Florida 47th in the nation for nonprofits. The top states have just over seven nonprofits for every 1,000 residents. There are over 94,700 nonprofit organizations in Florida; Nonprofits in Florida directly employed more than 62,000 people in 2020; Employees in nonprofit organizations account for 6.5% of the Florida workforce; Florida nonprofits generate nearly $105 billion in annual revenue; Nationally, Florida ranks 39th in nonprofit assets per capita; and Florida ranks 50th in volunteers for nonprofits.  Nonprofits are important because of their various contributions toward health, education, human services, and other charitable efforts. But they also make a significant contribution to the overall economy.  How to Start a Nonprofit in Florida  Unfortunately, it takes more than having a passion for your cause to start a nonprofit in Florida. There are a number of steps and procedural requirements you must fulfill before you can function as a valid nonprofit organization.  Form a Florida Nonprofit Corporation To start a nonprofit organization in Florida, you must file non-profit articles of incorporation with the Florida Department of State Division of Corporations, either by mail or online. The articles must include a series of detailed information about the nonprofit organization and its purpose.  Choose a Name for Your Nonprofit There are a couple of things to take into consideration when naming your Florida nonprofit. The name must be distinguishable on the records of the Department of State in such a way that it cannot be confused with another business. Stylistic spelling or punctuation is not an acceptable differentiator. It is a good idea to conduct a preliminary search of state records to ensure that your nonprofit name is unique. The name must include the words corporation, incorporated, corp., or inc.  Appoint a Registered Agent in Florida Whether you have a for-profit or nonprofit corporation in Florida, every corporation must have a registered agent for service of process. This is a representative corporation or individual who accepts all legal papers on behalf of the nonprofit corporation if there is a legal dispute. Create Bylaws for Your Nonprofit A Florida nonprofit corporation is not required to create and abide by corporate bylaws, though they are recommended. This could be important to establishing legitimacy for potential donors and creditors. These bylaws should establish the basic rules governing how you operate the nonprofit.  Board of Directors Hold a Meeting An organizational meeting is held once the board of directors is established. This first meeting should focus on the procedural elements of the nonprofit by approving bylaws, appointing officers, and establishing accounting periods and methods of financial reporting.  Obtain an Employer Identification Number (EIN) All Florida nonprofits must obtain a federal employer identification number (EIN). As a nonprofit, you must follow all regulations when it comes to employees and tax identification. You can obtain an EIN by completing an online application on the IRS website. Obtain Relevant Florida Business Licenses It is important to take into consideration the services or activities your Florida nonprofit organization conducts. If you are selling a product or service, you will need to look into a transactional business license. Hosting events may require various permits or types of insurance. The nature of the nonprofit determines the need for additional business licenses.   Comply with All Florida Registration and Reporting Requirements  It is important to understand the contribution reporting requirements for your Florida nonprofit organization. According to the Florida Solicitation for Contributions Act, charitable organizations and fundraisers that solicit contributions cannot commingle charitable contributions with noncharitable funds. These funds should remain in separate accounts to avoid conflict.  Any organization or individual who solicits donations from people in the state of Florida must register with the Florida Department of Agriculture and Consumer Services (FDACS) and renew annually. Small charitable organizations can meet this registration requirement by filing online.   Apply for Federal 501(c)3 Tax Exemptions Starting a nonprofit organization in Florida does not automatically make your organization tax exempt. You will need to complete and file IRS Form 1023. This is the Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.  Having established bylaws and business structure documentation can make the process easier. Some of these details include the founding and…

A promissory note is a written document that formalizes a promise to pay someone. If you want to lend or borrow money, you need a promissory note.  Purpose of Florida Promissory Notes Florida promissory notes establish a clear, legally enforceable record of a loan and obligation to repay. Casually lending a small amount of money to a family member or friend does not typically require a promissory note. However, if you are entering into a more sophisticated lending agreement or a large amount of money is involved, you should use a promissory note to protect your right to be repaid.  Types of Promissory Notes  Promissory notes go by a variety of different names, including IOU, loan agreement, promise to pay, personal note, or note. These are all ways of saying there is a legal obligation to repay a loan.  There are several types of loan agreements that a promissory note can memorialize.   Personal Promissory Note A personal promissory note involves your typical loan agreements between family and friends. You may not think you need a promissory note if you trust the other party. However, you may consider using one if you are borrowing or lending a large amount of money.  Investment Promissory Note Investment promissory notes are a way for businesses to raise capital. These are sophisticated agreements that typically involve ownership interests in the company.  Real Estate Promissory Note In a real estate promissory note, real property is used as collateral to secure a loan. If the borrower fails to repay the loan, the lender can place a lien on the property.  Commercial Promissory Note Commercial promissory notes are used when borrowing from a commercial lender, such as a bank. Often the lender imposes strict repayment requirements and will demand full repayment of the loan if the borrower defaults.  Secured and Unsecured Promissory Notes A promissory note can be either secured or unsecured.  A secured promissory note in Florida includes some type of collateral (or asset) in the agreement. This means that in the event the borrower fails to repay the loan, the lender can take the asset to satisfy the loan amount. For instance, a loan for the purchase of a house is often secured by a mortgage on the house, which is the collateral. An unsecured promissory note in Florida has no underlying collateral. If the borrower defaults on the loan, the lender will have to take more drastic measures to be repaid, such as debt collection or legal action.  Florida Promissory Note Requirements Legally binding Florida promissory notes must identify all parties, include the promise to pay, state the amount owed, and be signed by all parties.  Terms  There are many terms and details that a Florida promissory note may include, but they will vary based on the intent of the parties. Generally, Florida promissory notes include the following:  Names and contact information of all parties to the agreement; A statement of the promise to pay; Amount of the loan; Collateral used to secure the loan, if any; Repayment schedule (amounts, frequency) and interest; Date repayment is due; Penalties and late fees; Consequences of default; Governing state law; and Provisions for awarding attorney fees and costs.  All parties must sign the promissory note. Florida law does not require that the promissory note be notarized, but parties often take this extra step. Repayment Options The loan repayment can be structured in different ways depending on how the lender wants to be repaid.  Installment promissory note Under an installment promissory note, the borrower typically repays the loan in equal installments until the total amount is repaid. Single promissory note A single promissory note requires the borrower to repay the loan in one lump sum on a specific date.  Demand promissory note A demand promissory note requires the borrower to repay the loan amount whenever the lender demands. Typically, the lender gives some sort of notice to the borrower.  Balloon promissory note Under a balloon promissory note, the borrower remits smaller payments in the beginning of the loan term and then pays a large sum at the end, satisfying the loan.  Interest Amount Under Florida law, there is a cap on the amount of interest the lender can charge. For loans of less than $500,000, the maximum interest rate is 18%. For loans over $500,000, the maximum interest rate is 25%. The limit on allowable interest is called the usury rate. Loans that have an interest in excess of the usury rate may be unenforceable. Taxes When determining the final loan amount under a Florida promissory note, the lender should factor in the documentary stamp tax and the nonrecurring intangible tax, if applicable. For every promissory note, Florida law imposes an excise tax called the documentary stamp tax. The current rate is $0.35 for every $100 loaned.  For promissory notes secured by real property in Florida, the Department of Revenue imposes a nonrecurring intangible tax at a rate of 2 mills.The tax owed is based on the value of the underlying real property.  Template Promissory Notes  There are plenty of Florida promissory note templates available online. Templates can be a good starting point because they often include standard language that covers the basic terms of a promissory note. Unfortunately, boilerplate language may not reflect your true intent, and important terms may be omitted from the template. An attorney can draft or review a promissory note to ensure that it memorializes your intentions and protects your interests. It is especially important to hire an attorney if you are borrowing or lending a large amount of money.  Understanding Florida law regarding interest caps and applicable taxes is another reason to have a lawyer draft your promissory note. At BrewerLong, our team of experienced contract attorneys know the intricacies of Florida’s laws and can create a comprehensive promissory note to meet your needs. How to Collect on a Promissory Note If the borrower fails to repay the loan, it is important to know what action the lender can take. First, the lender…

There are many options available if you want to start a business. The most common way is to set up a sole proprietorship. Florida business owners can start a sole proprietorship very easily. Keep in mind, however, that there are important pros and cons to consider. Depending on the type of business, a sole proprietorship in Florida may not be the best option. “It is very tempting for a person starting out in business to avoid the hassle and cost of forming a company and instead operating as a sole proprietorship. That may work fine for some businesses, but there are some important risks to consider.” Florida Business Attorney Trevor Brewer What Is a Florida Sole Proprietorship? A sole proprietorship is the simplest and most common business structure people use. Sole proprietorships are unincorporated, meaning they are owned and operated by a single individual. From a legal perspective, sole proprietorships are much different than other kinds of business structures; there is no separation between the owner and the business. Starting a Sole Proprietorship In Florida Unlike with other business types like LLCs or corporations, you do not need to register a sole proprietorship in Florida. I n fact, many freelance workers are likely operating as a sole proprietorship without knowing it. As a result, starting a business as a sole proprietorship is incredibly easy. However, if you plan to use a name other than your legal name, you will have to register it as a fictitious name. In Florida, a fictitious name is what you might know as a “doing business as” or “DBA” name. You can submit fictitious name registrations to the Florida Division of Corporations either online or by mail. Not including a certified copy, it costs $50 to register a fictitious name. Before you register a fictitious name for your sole proprietorship, Florida law requires that you advertise that fictitious name in at least one newspaper in the county where the business is located. Pros of a Sole Proprietorship in Florida By forming a sole proprietorship, Florida business owners can take advantage of several benefits they might not get with other business structures. Sole Proprietorships Are Easy to Form As mentioned above, sole proprietorships do not require any special registration. As a result, they are fast and easy to form if you want to get your business up and running quickly. Less Paperwork In addition to the lack of registration paperwork, sole proprietorships require less paperwork to operate in general. Unlike LLCs, corporations, and even partnerships, a sole proprietorship does not require any sort of formation document. This means no need to worry about drafting and maintaining an operating agreement, bylaws, or another kind of governing document. Inexpensive to Form and Operate Sole proprietor Florida businesses don’t have to pay anything unless they will operate under a fictitious name. Consequently, sole proprietorships are one of the cheapest business types to start. By contrast, other business types may cost hundreds of dollars in fees after all is said and done. Sole Proprietors Have Complete Control Because the sole proprietorship belongs to a single owner and operator, a sole proprietor has complete control over their business. They can make decisions and changes much more rapidly than in other business types. Simplified Taxes Tax laws treat a sole proprietorship as one and the same with its owner. Accordingly, the business itself is not taxed separately, and all business income is the same as the owner’s. Thus, sole proprietors only need to report their income from the sole proprietorship on their personal income tax return after calculating losses and expenses. Cons of a Sole Proprietorship Florida Unfortunately, the flexibility of a sole proprietorship also comes with several downsides. As a result, it is very important to consult with an attorney to determine whether a sole proprietorship is right for you. Particularly when it comes to personal liability, it may be worth it in the long run to spend the time setting up an LLC or corporation instead. You Have Personal Liability for Debts and Obligations One of the biggest reasons people choose to form LLCs and corporations is the limited liability they provide. Because the law views LLCs and corporations as separate entities from their owners, those businesses can take on debts by themselves. With a sole proprietorship, Florida business owners subject themselves to personal liability for any debts or obligations incurred by the business. This is true even if you operate under a fictitious name. As your business grows, this can pose a significant risk; your assets and personal finances are exposed and may be taken to pay off debts or judgments incurred by you, your business, or your employees. More Difficulty Securing Funding If you plan to rely on investments to help grow your business, a sole proprietorship may not be the best option. Because there are no stocks or other ownership interests to sell, sole proprietors must rely on personal loans rather than traditional “investments.” Investors may be less willing to provide funds under this arrangement. Simpler Taxes Mean Fewer Deductions Although tax rates may be higher among LLCs and corporations, they are permitted to make certain deductions for business expenses. Sole proprietors do not have this luxury, and depending on the cost of doing business, you may end up paying more in taxes as a sole proprietor. To avoid these issues, it is important to speak with a Florida business law attorney or tax professional about your situation. They can help you determine what kind of business structure will benefit your business the most. Other Businesses May Be Hesitant to Work With You Whether it is true or not, many businesses are under the impression that an unincorporated business is less stable or professional than an incorporated one. Therefore, some businesses may be less willing to engage with your business if it is a sole proprietorship. Selling Your Business Is More Difficult When you’re ready to sell your business, having a sole proprietorship can make this process…

Businesses registered in Florida, whether they are LLCs, corporations, or something else, may occasionally need a certificate of good standing. Fortunately, to get a certificate of good standing, Florida businesses need only complete a few simple steps. What Is a Florida Certificate of Good Standing? Simply put, a certificate of good standing, also called a certificate of status, serves as legal proof that you properly registered your business with the Florida Secretary of State. The certificate shows that your company is authorized to conduct business in the state of Florida. You can obtain a certificate of good standing for any business you’ve registered in Florida. In other words, both foreign (out-of-state) and domestic (in-state) business entities can get a certificate of good standing as long as they are registered. Why Do I Need a Certificate of Good Standing? There are many reasons why you might need a certificate of good standing. Although it is not necessary to have a good standing certificate, Florida businesses will often request one in certain circumstances. For example, since the certificate provides proof of the legitimacy and compliance of your business, a bank may request one when you apply for a business loan. A bank may also ask you to provide a certificate of good standing when purchasing business insurance or opening a business bank account. Additionally, a certificate of good standing will be necessary to do business in another state. Most states required business entities formed out of state to register as a foreign entity within that state. During this process, the Secretary of State in the new state will want to verify the status of your business using a Florida certificate of good standing. What Are the Requirements to Get a Florida Certificate of Good Standing? To get a certificate of good standing, Florida businesses must be properly registered with the Florida Secretary of State. In addition, the business must be one of the types of business entities for which a certificate of good standing is available—only for-profit and nonprofit corporations, limited liability companies, and limited partnerships may get a certificate of good standing. Additionally, a registered business must be current on all required documents for the year. For example, Florida requires certain registered businesses to file an annual report. You must file this report before requesting a certificate of good standing. Where to Get a Certificate of Good Standing in Florida To get a certificate of good standing, Florida businesses must order one from the Florida Secretary of State through the Florida Division of Corporations. Florida uses the term “certificate of status” instead of certificate of good standing, but they are the same document. You can order a certificate of status online to receive a PDF version or request a certificate by mail. If you order online, all you need is your entity’s registration or document number, an email, and a credit card.  If you order a certificate by mail, you must submit a written document that includes: The entity’s name; The entity’s registration number (or document number); What kind of document was filed for your entity and when; and A check or money order. If paying by check, the check should be payable to the Florida Department of State. Orders by mail should be sent to the Certification Section at: Department of StateDivision of CorporationsCertification SectionP.O. Box 6327Tallahassee, FL 32314 How Much does a Florida Good Standing Certificate Cost? The cost of a Florida certificate of good standing depends on the type of entity the certificate is for. The certificate costs $8.75 for corporations and partnerships and $5 for LLCs. Does a Florida Certificate of Good Standing Expire? When you order a certificate of good standing, it generally does not have an expiration date. However, if another business requests the certificate from you, they may require that you get it within a specified time period. For example, when a foreign corporation registers with the Florida Secretary of State, it must provide a certificate of good standing issued within 90 days of the filing date. Similarly, a bank or other business may request that you get a current certificate of good standing before doing business with you. Need to Hire a Florida Business Attorney? Getting a certificate of good standing is just one part of operating a business in Florida. BrewerLong specializes in providing valuable legal services to small and medium-sized businesses in the Orlando area. Whether you need help setting up your business, with intellectual property matters, or with other general business law issues, we can help. Contact us today online to schedule an introductory phone call with one of our attorneys.

Delaware has been known as the state whose laws provide the most flexibility and have the most protections for corporations, limited liability companies, and limited partnerships. In recent years, other states have begun to take notice and become more corporation-friendly. One of those states is Florida. If you are a business owner, deciding on incorporating in Florida vs Delaware can be a big decision.  Why Should You Incorporate? Incorporating a business means turning your company into one that is formally recognized by your state of incorporation. When you incorporate your company, it becomes its own legal business structure rather than a group of founding business members.  Reducing liability is the primary benefit of incorporation. As a business owner, you bear responsibility for all losses and debts your business may incur. When you incorporate your business, it typically reduces your liability to only the amount of capital that you personally invest. In most cases, personal assets cannot be used to satisfy the debts of the business.  Deciding Between Incorporating in Florida vs Delaware A company may choose to incorporate in any jurisdiction, including international jurisdictions, so long as it is properly registered with the state in which it conducts business. Traditionally, Delaware has been the state of choice when it comes to incorporation. This is because of corporate-friendly taxation laws and a well-established business law legal system. Nearly half of the nation’s publicly traded companies, including global corporate leaders such as Apple, Coca-Cola, Google, and Wal-Mart, are incorporated in Delaware. Today, deciding between incorporating in Florida vs Delaware requires some analysis. There are several important factors to consider when making this decision. These factors include: Whether your business has a physical storefront; State taxes; Filing fees; and The general business laws of each state. If you own a business with a physical location, you should understand that regardless of where you incorporate, the state where you conduct your business will want the tax revenue. If you do not have a physical address in the state you choose to incorporate in, you will need a registered agent to review the service of process and legal notices at an office location in that state.  Incorporating in Florida vs Delaware Delaware is known as the leader for corporations in the U.S. Some big reasons have been their business laws and tax regulations. Florida also has an established set of laws specific to incorporation and business activities. There are numerous pros and cons of incorporating in either Delaware or Florida that could sway your decision depending on the priorities of your business.  Incorporating in Delaware Delaware is largely known as a “business-friendly” state due to its corporate laws and tax regulations. The Delaware Court of Chancery has existed for over 200 years with the sole purpose of handling corporate law matters. Judges with specific expertise in business law resolve legal disputes. Many investors, such as venture capitalists and angel investors, prefer to invest in Delaware companies due to Delaware’s tax laws and the existence of the Court of Chancery. Corporate attorneys are often more familiar with Delaware corporate law because it has been so prominent over the years.  If anonymity is important to your corporation, company records for Delaware corporations are not open to the public but can be acquired for a fee. Shareholder meetings are less formal than other states and do not require corporations to provide records of meetings that include minutes and resolutions.  If you are forming a company in Delaware but not actually conducting business there, you do not need to acquire a business license. Delaware does require corporations to pay an annual franchise tax, an annual report fee, and corporate income tax (8.7%). The annual franchise tax in Delaware is based on the size of the corporation. Incorporating in Florida Florida has recently surfaced as a competitor for corporate businesses. If you have an online business, Florida leads in cost-effectiveness and convenience. Florida’s online division of corporations makes searching for and filing documents convenient and easy compared to many other states. Florida’s filing fees are often lower than other states. However, additional taxes and fees may apply on an ongoing basis. There are no minimum capital requirements to incorporate in Florida, and Florida does not require corporations to pay an annual franchise tax. To keep the corporate entity active, corporations do have to pay the annual report fee. Florida corporations are subject to the corporate income tax (5.5% of taxable income over $5,000). “S” corporations in Florida are exempt from state corporate income tax unless federal income taxes are owed. The state does not levy any personal income taxes on “S” corporation shareholders.  Florida corporations also allow a variety of employee benefit plans, which may help corporations attract the most qualified people to serve the business. Corporations in Florida may also deduct contributions made for employee disability and health benefits. “In most cases, a corporation that is headquartered in Florida, does most of its business in Florida, or has most of its employees in Florida should be incorporated in Florida, unless there is a specific reason to incorporate in Delaware or another state.” Florida Business Attorney Trevor Brewer Contact an Experienced Corporate Attorney There is a lot that goes into making the best decision on incorporating in Florida vs Delaware. Each business is unique. Seek counsel from an experienced business attorney who understands the intricacies of incorporating in both states.  The team at BrewerLong can guide you through the entire incorporation process, including deciding the best corporate structure for your business and how to comply with all relevant business laws. Contact us to set up a consultation and learn more about what we can do to help your business succeed.

At a certain point in its lifecycle, expanding a corporation into other states may be necessary for continued growth. If you’ve thought about becoming a foreign corporation doing business in Florida, however, you should be aware of how the state treats out-of-state corporations. Florida requires out-of-state businesses to register in Florida before they can engage in any business transactions. Accordingly, knowing how and whether you have to register as a foreign corporation is important. “Foreign corporations required to register in Florida include both companies that are expanding into the state and new companies headquartered in Florida but formed under the laws of Delaware or a different state.” Florida Business Attorney Trevor Brewer What Is a Foreign Corporation in Florida? State law views business entities as either foreign or domestic. A domestic entity is one formed and operated within the same state. By contrast, a foreign corporation is one formed in a different state. Florida law requires corporations to apply for qualification as a foreign business before “transacting business” within the state. As a result, a corporation formed outside of Florida wanting to do business in Florida must separately register in Florida as a foreign corporation. However, certain activities do not count as transacting business, including: Defending or settling a legal proceeding; Carrying on internal affairs, like shareholder meetings; and Conducting limited, one-off transactions that conclude within 30 days. Failing to register subjects foreign corporations to back taxes and civil penalties. Because the nature of “transacting business” is vague, it is in a foreign corporation’s best interests to register if it does any regular business within Florida’s borders. Qualifying a Foreign Corporation Doing Business in Florida A foreign corporation can qualify to do business in Florida by registering with the Florida Division of Corporations. 1. Obtain a Certificate of Existence from Your Home State As part of the application process, foreign corporations must provide an original certificate of existence. This certificate, also called a certificate of good standing, is an official document that shows the proper formation of your corporation and the legal authorization to do business. To qualify as a foreign corporation in Florida, you must provide an authenticated original certificate of existence, not a photocopy. Therefore, it is necessary to obtain an official certificate from the Secretary of State for the state where you formed your corporation. Finally, note that the certificate must issue within 90 days of the date you file your application. 2. Register an Agent in Florida Foreign corporations must have a registered agent based in Florida. Additionally, the registered agent must have a street address and not a P.O. Box. However, foreign corporations are unlikely to have a physical presence in the state before they register. As a result, foreign corporations often use a registered agent service. 3. Complete the Foreign Qualification Application The Florida Division of Corporations offers separate applications for profit and non-profit corporations. Some of the information the application requires includes the: Name, date of incorporation, and address of the foreign corporation; Federal Employer Identification Number (FEI or EIN); and Personal information for the corporation’s directors. State laws also require corporations to include “Company, “Inc.,” “Co.” or similar in the name of the corporation. Thus, when it comes to the name of the corporation, make sure you include the proper entity designation. 4. Submit the Application and Required Fees Submit the completed application, including the cover letter, certificate of existence, and fee via mail to the Florida Division of Corporations at the following address: Registration SectionDivision of CorporationsP.O. Box 6327Tallahassee, FL 32314 In addition to the $70 registration fee for each application, applicants may choose to pay $8.75 each for a certificate of status and a certified copy of the application. Checks should be made out to the Florida Department of State. 5. Make Sure to File Annual Reports After Qualifying A foreign corporation doing business in Florida must file a yearly annual report between January 1 and May 1, starting the year after registration. Foreign corporations may file annual reports online with the Florida Division of Corporations using the document number issued after successfully registering as a foreign corporation. The fee for filing the annual report is $150, with a $400 late fee for filing after May 1. Because Florida may cancel the foreign registration entirely if you want too long, it’s a good idea to always make sure you file the report before May 1. Contact a Florida Business Law Attorney If you have a foreign corporation doing business in Florida or if you’re looking to expand your business, BrewerLong can help you with your foreign qualification. Our practice focuses on helping small businesses in Florida with a variety of business law issues from formation to risk management. Contact us today online or give us a call at 407-660-2964 to set up a consultation.

Contracts are important legal documents that bind businesses and individuals to their promises. Business contracts might come in the form of purchase orders, sales agreements, and employee contracts. Frankly, without contracts, operating a business would be nearly impossible. Contracts are essential to a business’s operations and future success. Because contracts are so important, you might be wondering, Is having a legal contract review something my business could benefit from? The short answer is yes, absolutely!  “It is essential that business owners and executives understand the contracts that affect their businesses, including leases, employment contracts, customer contracts and vendor contracts.” Business Attorney Ashley Brewer A skilled contract review lawyer can provide you with professional advice to ensure that the terms of the contract are enforceable and advantageous to you. Contact BrewerLong today to schedule an appointment and see how our contract law attorneys can help you.  How Can a Contract Review Attorney Help Me? There is no legal requirement that you must have your contracts reviewed before signing. However, having an experienced attorney help you with your legal contract review can’t hurt. In fact, it is strongly recommended. But not all contract review matters are the same. There are a number of ways in which a contract review lawyer may be able to help you. Issue-Specific Contract Review In some cases, you might have a contract that you understand generally but you have a few specific questions or concerns. If this is the case for you, you might seek out an issue-specific contract review. This type of review involves asking a specific question relating to the contract or requesting that a specific provision of the contract be explained to you. Your attorney can then review the contract with your specific question or questions in mind.  Examples of issue-specific questions that you might have regarding a contract include: How does the non-compete clause in my contract affect my rights? What does the non-solicitation clause mean? Does this contract affect my intellectual property rights? Will signing this contract prevent me from working with other clients? No matter how simple or complicated the question, it’s always a good idea to run it past an experienced contract review attorney to best understand and protect your rights.  General Contract Review Contracts are often long documents full of legal jargon that can be difficult to understand. A general contract review can be a great way to gain a basic understanding of your legal contract as a whole. With the help of an experienced contract review attorney, you can better understand your rights and obligations under a particular contract. If you are seeking a basic contract review, your lawyer will review your entire contract at a surface level and answer any questions you may have about the agreement. Your attorney will also notify you of any red flags or portions of your agreement that require specific attention. Basic Contract Review and Edits A contract review plus edits is more comprehensive and goes one step further than just a contract review. Not only will your contract review lawyer evaluate the entire contract and advise you on potential issues, but your attorney will also propose edits to your contract based on the issues he or she has identified. Of course, your lawyer will review these proposed revisions with you to ensure your understanding and agreement with the suggested edits. This will give you the opportunity to approve changes, correct issues that were revealed during the review, and better protect your rights.  Basic Contract Review and Ongoing Negotiation In some cases, the other contracting party may not be willing to agree to your proposed revisions so easily. When this is the case, you might need an attorney to help negotiate the contract terms on your behalf. After reviewing and editing your contract, your lawyer can submit the revised contract to the other party. Your lawyer can then negotiate further changes to the contract moving forward in your best interest. In many business contracts, there are numerous terms that must be decided before the contract can be finalized. This often requires a lot of back-and-forth between the contracting parties. Having a contract review attorney on your side to facilitate these negotiations can help streamline the process and get your contract completed in an efficient manner. What Kinds of Contracts Need Review? There are a number of situations in which you might need a legal contract review. In reality, any contract that holds legal implications should be reviewed by a contract review lawyer.  Examples of contracts you might want reviewed include: Leases and subleases,  Employment agreements, Termination contracts, General business contracts, Partnership agreements,  LLC operating agreements, Products or services sales contracts, Independent contractor agreements, and Non-compete agreements. If you have a contract that you need reviewed for any reason, contact an experienced contract review lawyer today to discuss your options. How Much Will a Lawyer Cost to Review My Contract? Before taking any next steps, it is natural to wonder how much a lawyer will cost to review a contract.  There is a common misconception that hiring a lawyer will cost an arm and a leg. This misconception leads many to believe that hiring a contract review lawyer is not worth the cost. In fact, the opposite is true.  While there is of course a cost required to hire an attorney, hiring a lawyer at the outset to review your contracts can actually save you valuable time and money in the long run by ensuring that your contracts are airtight and enforceable before potential issues ever arise.  All law firms structure their fees differently. Don’t hesitate to reach out to BrewerLong to discuss our fees before you decide whether and how you’d like to move forward. Contact the Contract Review Attorneys at BrewerLong Today If you have contracts that need to be reviewed, we want to help. Our team of experienced attorneys knows how to help with all your business-related needs.  We have helped countless clients with drafting, reviewing, and negotiating their contracts,…

You have a great business idea and need time to bring it to fruition. In the meantime, you may wonder how to protect a business idea and ensure your future success. Unfortunately, many fail to take reasonable steps in protecting a business idea from competitors and lose their rights, even as the original creator. How to Protect a Business Idea There are a number of ways to legally protect your business ideas. The best option for you depends on the type of idea and what you want to do with it. Reviewing all options with a business law attorney to protect your business ideas ensures you make the right choices moving forward.  Federal or State Registration When you’re thinking about how to protect an idea for a business, one of the first things you are likely to consider is officially registering your idea with the appropriate federal or state office. Registration falls into three main categories: patents, copyrights, and trademarks. Each of these categories provides different types of protection and for different lengths of time. Patents A patent is a property right granted by the U.S. Patent and Trademark Office (USPTO). The title of patent holder entitles you to exclude others from using, making, or selling your invention for some time. The USPTO provides information on how to patent a business idea.  There are three different types of patents: utility, design, and plant.  Utility patents protect the way an invention functions, and design patents protect the way an invention looks. Plant patents can protect invented or discovered asexually reproduced plants. Design patents last for 15 years from the date of the grant, while utility and plant patents last for 20 years. Consult with a qualified business law attorney to discuss how to patent a business idea. Patent registration is costly and requires considerable time. A business law attorney ensures you file for the correct patent and eliminates delays through their knowledge of the patent application process. Copyrights A copyright represents a collection of rights granted to an individual upon creation of an original work. A copyright provides answers to the question of how to legally protect a business idea. Copyrights include the following: The right to reproduce the work, The right to prepare derivative works, The right to distribute copies,  The right to perform the work publicly, and The right to display the work publicly. A copyright grants you, the owner, the right to assign, license, or transfer the copyright to others. Additionally, the power of copyright permits the owner to choose the way the public views your work. Trademarks A trademark is a word, phrase, symbol, or design that identifies and distinguishes the source of goods. A service mark is a word, phrase, symbol, or design that identifies or distinguishes a service’s source. Examples of trademarks include slogans, brand names, and brand logos. Acquiring the rights to a trademark does not require registration. The first and continuous use of a trademark in commerce establishes your rights. However, registering a trademark does provide additional protections. You may decide to register your trademark with the USPTO, your state, or both, depending on the type of protections you need.  Non-Disclosure Agreements A non-disclosure agreement may serve as an effective protective measure if you plan to work with others on your idea. A non-disclosure agreement, or NDA, operates as an agreement between parties not to disclose your idea or share information with third parties. A qualified business attorney may draft an NDA with no expiration date, thereby providing you even stronger protection. Non-Compete and Non-Solicitation Agreements A non-compete agreement operates similarly to an NDA, but it serves to prevent someone from starting a business similar to yours. A non-solicitation agreement may work in conjunction with a non-compete agreement to prevent someone from stealing your employees or clients. Typically, non-compete agreements have to be limited in time, scope, and location. For example, if your company sells tires in a small town, it would be difficult to enforce an agreement that prevented someone from selling tires anywhere in the country for the rest of their lives. However, the agreement may prevent someone from starting a competing tire business for five years within a 30-mile radius of your business. Work-for-Hire Agreements  Work-for-hire agreements can allow you to get help with your idea without giving up your rights. In a work-for-hire agreement, you hire someone to work for you to analyze and improve your idea. Anything these individuals come up with to perfect your idea becomes yours. If you file a patent, someone you hire will identify as a co-inventor on your patent. Despite this title, they own no rights to the patent. Provisional Patents  The U.S. Patent and Trademark Offices issues provisional patents (PPA) to protect an invention. Provisional patents protect a patent during the 12 months before filing the formal application. The provisional patent allows the inventor to pitch the idea, test its commerciality, and fine-tune any prospective issues before completing the expensive patent application. The recognizable “patent pending” label affixes to patents during this provisional period. Trade Secrets Law Another way to protect your ideas is to keep them secret. The Uniform Trade Secrets Act (UTSA) protects trade secrets that:  Have either actual or potential independent economic value because they are not generally known; Have value to others who cannot legitimately obtain the information; and Are subject to reasonable efforts to maintain their secrecy. There exist two common ways of stealing trade secrets. One is through dishonest means such as stealing. Another is through a breach of confidence. For example, a former employee who had rightful access to the trade secret may use it without permission or sell it to another company. If someone steals your secret, you may have a legal claim against them if all three of the above elements are present. The steps you take to protect your trade secret are particularly important. You can show you made reasonable efforts to maintain secrecy by doing things like: Limiting the number of…

Going through a divorce in Florida is an emotional and stressful process. If you currently operate a successful LLC, you may wonder how Florida law impacts divorce and your LLC business. Consult with a family law attorney to discuss the consequences of divorce for an LLC as Florida requires division of the marital property at the time of divorce. However, whether your divorce impacts the ownership of your LLC depends on the facts surrounding your marriage. Division of property due to divorce is a complex process that often requires negotiation to resolve issues. Contact a BrewerLong family law attorney to discuss your LLC and divorce. Different Types of LLCs  There are multiple types of LLCs recognized in Florida. Whether your divorce and LLC ownership impact your estate division does not depend on the type of LLC. Florida Domestic LLCs Florida domestic LLCs are simply LLCs formed in the state of Florida. LLCs formed outside the state of Florida may become Florida LLCs through a process of conversion. Florida Foreign LLCs Foreign LLCs refer to LLCs formed in an area not governed by Florida law. These LLCs could be LLCs formed in another state or another country. Despite its foreign characterization, a foreign LLC may conduct business in Florida by obtaining a certificate of authority from the Division of Corporation of the Department of State. To obtain a certificate of authority, your LLC must conduct business within the state of Florida.  Florida Professional LLCs Professional LLCs, or PLLCs, are LLCs created for a specific purpose and certain individuals. In Florida, only people providing licensed professional services may form PLLCs. Licensed professionals include doctors, lawyers, certified public accountants, dentists, and others. Florida Nonprofit LLCs A Florida nonprofit LLC is an LLC created for purposes other than earning a profit. Typically, a Florida nonprofit LLC qualifies for exemption under Section 501(c)(3) of the Internal Revenue Code. A Florida nonprofit LLC must satisfy several requirements for the Section 501(c)(3) exemption.  Florida Series LLCs A series LLC is a unique LLC wherein the articles of formation permit unlimited segregation of membership interests, assets, and operations into independent series. Florida does not permit the formation of series LLCs. However, Florida does recognize if a branch of a series LLC formed in another state transacts business in Florida. By filing a certificate of authority, Florida recognizes the cell as an independent entity in Florida. How Is an LLC Formed? Your LLC is formed by filing necessary documents with the State of Florida. In most cases, you will also prepare an operating agreement that governs the LLC’s operations. Articles of Organization You need to file your articles of organization with the State of Florida to identify the LLC. The articles of organization include basic information such as the name and address of your business and its registered agent as well as well as a statement of purpose and an authorized signature. Operating Agreement An LLC Operating Agreement provides the structure for the LLC. The agreement outlines the duties and responsibilities of each of the members. It typically also provides information regarding member removal, LLC dissolution, and the appointment and resignation of members.  Every LLC should create an Operating Agreement to provide procedural safeguards and prevent conflict among the LLC members. The Operating Agreement outlines smooth business operations with clear information and procedures to avoid future conflict among members. How Does Florida Law Divide Property in a Divorce? Florida is an equitable distribution state for purposes of divorce. Florida defines equitable distribution as the fair division of all property between married parties. Property acquired during the marriage is considered marital property and is fairly divided between the parties. Property acquired before marriage, inherited during the marriage, or excluded by agreement remains separate and is referred to as non-marital property. Marital Property  Marital property includes property and assets acquired during the marriage regardless of who purchased it or whose name is on it. Marital property typically includes the following: Personal or real property held by the parties; Retirement benefits accrued during the union; Increase or appreciation in the value of separate assets (in some cases); Workers’ compensation, insurance, pension, and social security benefits paid during the marriage; and  Stock options. In addition to the above listed items, gifts from one spouse to another during the marriage often identify as marital property. Non-Marital Property  Florida law excludes non-marital property in the division of the marital estate during a divorce. Non-marital property includes the following: Property acquired before marriage, Property acquired before or during marriage through inheritance or gift by someone other than the spouse, and  Income earned by non-marital assets. Even if your LLC is marital property, it does not mean you must resign yourself to losing your interest in it. An experienced family law attorney at BrewerLong can conduct a careful assessment of all your marital and non-marital property assets to negotiate property division. Is My LLC Marital or Non-Marital Property? Your LLC is an asset. Whether it is deemed an asset of the marriage or non-marital property depends on factors such as: When you formed the LLC; Whether you invested marital assets in the LLC; Whether your spouse contributed to the LLC; and Any agreements between you and your spouse regarding the LLC. Even if you formed the LLC before marriage, it can become marital property. For example, if you invested marital funds in the business or if your spouse worked in the business without compensation, a court might decide that the LLC has become a marital asset. When an LLC and divorce are involved, a lawyer can help you determine the value of your LLC. A business appraisal can provide an accurate value of your LLC. If your LLC is determined to be marital property, it can strengthen your spouse’s negotiating position. However, a divorce does not need to mean the end of your LLC business. Hiring a qualified family law attorney in Florida can help you reach an agreement with your spouse that will preserve the business…