Selling Business Florida

Selling a business you’ve poured your blood, sweat, and tears into can be just as exciting as starting a business. After all, it’s proof that all your hard work paid off. Or course, selling a business in Florida isn’t a decision that should be taken lightly. Considering the state of your business and what you’ll do next will better prepare you for the entire process. “Selling a business is one of the most profound actions that an entrepreneur ever takes. The process requires careful planning, hard work, and a good support team.” Business Transactions Attorney Trevor Brewer 1. Ask Yourself: Is It the Right Time to Sell? It’s easy to get caught up in the process of marketing and selling your business. Keep in mind, however, that there is a right time to sell. Market conditions, shifting consumer interests, and availability of competitors all affect whether you’re in a seller’s or buyer’s market.  As when selling a house, you should consider whether it is the right time to sell your business. Although there’s no exact way to do so, it’s often a good idea to evaluate the market conditions around the time you plan to sell; consider consulting industry experts or analysts who can give you advice. Then, before committing to a sale, ask yourself, Do I need to sell now? Or can I wait a year or more before putting my business out there? 2. Is the Buyer the Right Person for Your Company? Over time, your business becomes as much a personal endeavour as it is a professional one. This is especially true if you’ve been there since the beginning. As a result, it isn’t surprising if you’ve developed at least some emotional attachment to your business. Although it’s generally a good idea to remove emotions from the equation when it comes to selling a business in Florida, you can still consider whether you are comfortable with a potential buyer’s approach to your business. If their beliefs and goals don’t align with yours, are you still okay with the approach they might take? For example, would you care if the buyer purchases your business, guts it, and moves on? Or would you rather find someone as passionate as you are in taking your business to the next level? The answer to these questions may change during the sale process, but considering them early gives you the chance to lay out your priorities before it’s too late. 3. Have an Exit Strategy Business owners often find themselves hyper focused on building their business. Over time, doing so becomes as much a hobby as it is a job. As a result, they rarely consider how the business (or at least their involvement in it) will end. Accordingly, it is important to take some time to develop a proper exit strategy before putting your business out there. For example, you might consider Whether you want to transition to a new role within the company leadership as part of the sale; Whether you are financially prepared for a possible non-compete period after the sale; How you will manage or invest the proceeds of the sale; and Whether it is time to retire. When you’ve spent so much time growing your business, selling it can leave a hole in your daily routine. Accordingly, make sure you carefully consider how the sale will affect your life outside the business as well. 4. Take an Honest Look at the Strengths and Weaknesses of Your Business No business is perfect. Honestly evaluating where you can improve helps determine what your business is worth and whether it is time to sell. There’s no specific approach to this consideration, but looking at your business from the perspective of a potential buyer may be enlightening. Ask yourself, What does my business have to offer? For example, Do you have a strong customer base, or is much of your business concentrated in just a handful of clients? What valuable intellectual property or brand recognition do you have? How do your revenue and profit compare? If you’ve grown your business as a labor of love, then you may have some difficulty admitting its flaws. However, remember that when selling a business in Florida, buyers act based on what the business is like right now, not based on potential. If there are weaknesses, addressing them early can significantly increase the value of your business. 5. Familiarize Yourself with the Process of Selling Your Business In a perfect world, you’d have buyers lining up at your door ready to accept whatever terms you offer. In reality, the process is much more complicated than that. Depending on the nature of your business, your industry, and market conditions, simply finding a buyer may be extremely difficult. Accordingly, it’s a good idea to familiarize yourself with what selling your business in Florida actually looks like. Generally, you can expect the following steps: Find a broker: Unless you already have a willing buyer, the first step is usually to find an agent or broker who will connect you with one. Your broker should be familiar with your industry and trustworthy to act in your best interest. Appraise your business: Even before finding a broker, you need to get an appraisal of your business’s value. There are many ways to value a business, including using earnings before interest, depreciation, taxes, and amortization (EBITDA) or with the discounted cash flow method (DCF). Broker contacts potential buyers: Your broker will send an offer memorandum or “teaser” to potential buyers. This letter presents the value proposition of your business to any buyers. As a result, this letter is incredibly important and should be drafted by a professional. Buyer responds: If a buyer is interested, they will take some time to conduct due diligence to confirm that what you’ve said about your business is true. Hire an attorney: If you haven’t already, hiring an attorney will be necessary from this point on. If you try to sell your business without professional help,…

Breach of Confidentiality

Almost all businesses will involve and contain certain confidential information. Whether it is a secret recipe for your restaurant or sensitive client data, there will almost certainly be data and information that must be kept safe and classified.  Unfortunately, however, it is not uncommon for confidential information to get out one way or another. To make matters worse, workplace confidentiality violations are sometimes caused by employees who may work for that very business.  When it comes to running a business, breach of confidentiality consequences can be dire. Thus, it is important to know when these situations might arise, the potential consequences, and what you can do in the aftermath. “Employees are trusted with a great deal of very valuable information. Despite an employer’s best efforts, it’s not always possible to prevent disclosure of confidential information.”  Employment Attorney Kristi Benson When you are faced with a breach of confidentiality situation in the workplace, do not hesitate to contact BrewerLong. Our team of Florida employment lawyers specializes in helping small and medium-sized businesses get through these types of legal disputes and more. What Is a Breach of Confidentiality? A breach of confidentiality occurs when proprietary data or information about your company or your customers is disclosed to a third party without consent.  Breaches of confidentiality happen to companies each and every day throughout the nation. A breach might exist where a trade secret is shared with a competitor, an employee’s private information is disclosed, or clients suffer the consequences of careless privacy practices.  Examples of Workplace Confidentiality Violations There are a variety of scenarios in which workplace confidentiality violations may occur. Regardless of the precise circumstances leading to the violation, the fact remains that breach of confidentiality consequences can be severe.  Disclosure of Employees’ Personal Information Employees provide substantial private information during the application and hiring process for a position. Such data might include credit information, social security numbers, and education history.  Employers are prohibited from disclosing the personal information of their employees without prior authorization. Failure to keep this information confidential may constitute a breach of confidentiality.  Client Information Is Obtained by Third Parties Data breaches target businesses and individuals all over the globe. And unfortunately, such attacks have only increased with the rising popularity of social media and the internet.  Hackers use emails, text messages, and online advertisements in an attempt to gain access to private information such as social security numbers, credit card information, or account passwords. Security measures, cybersecurity training, and workplace internet use guidelines aim to prevent the missteps that can lead to a breach. Any environment, not just online, lacking proper guidelines for privacy and security is susceptible to a breach of confidential information. For example, two employees talking about confidential client information at a public place could inadvertently disclose that information to a passerby. In such a scenario, these individual employees may face breach of confidentiality consequences due to their actions. Breach of Confidentiality Consequences Often, a breach of confidentiality is the result of the actions, or failure to act, of one or more individual employees. However, this does not mean that the business as a whole will not face any consequences.  In fact, the unfortunate truth is that a breach of confidentiality by even one individual employee can result in many adverse impacts to the entire business entity. Loss of Trust  Confidentiality agreements aim to protect the secrets and operations of the parties involved in the contract. Violation of the terms often results in the deterioration of those relationships and your reputation. Employees guilty of confidentiality breaches can face long-term consequences and find themselves blacklisted in the industry.  However, it is possible that the industry could likewise lose trust in your business. A breach of confidentiality is a serious claim that has the potential to cause others to lose faith in you, your employees, and your entire operation.  Thus, always take appropriate steps to prevent workplace confidentiality violations from occurring where possible. Negative Impacts on Your Business As customers, clients, and the community lose confidence in your ability to keep information confidential, this may lead to additional negative impacts on your business as a whole. An internal breach of confidentiality can affect your business’s overall brand and reputation, both of which are crucial aspects of growing your business. As a result, your business could lose employees, future clients, branding opportunities, and more.  Ultimately, this can result in a loss of valuable revenue for your company.  Civil Lawsuits Even more concerning for many businesses is the potential for civil lawsuits arising out of a breach of confidentiality. Many victims file civil lawsuits against businesses or employees who breach their confidentiality. However, being put in the position of defending a breach of confidentiality lawsuit is never ideal for any business, whether it is a new, growing, or well-established one.  The time and expense required to defend against such an action can put your business in an extremely difficult situation. Criminal Charges In some cases, breaches of confidentiality may even carry the possibility of criminal action. Criminal charges arise only in extreme cases that resulted in significant financial, emotional, or physical loss to the victim. For example, theft of intellectual property or using confidential information for financial gain could warrant criminal punishment. In the event of criminal violations, state or federal government officials prosecute the individual responsible for the breach.  What Can My Business Do About an Employee Who Caused a Breach? If an employee is responsible for workplace confidentiality violations, you may be wondering what recourse you may have. Many companies use confidentiality agreements when hiring new employees. A confidentiality agreement typically includes an explicit clause stating that an employee who breaches the confidentiality agreement will be terminated. Employment contracts also often authorize termination for the unauthorized disclosure of confidential information. Thus, termination may be a viable option. Sometimes, however, termination of the employee may not be sufficient to repair the damage that resulted from their breach. In certain cases, employees who commit confidentiality breaches and…

Limited liability companies, also known as LLCs, combine the benefits of corporations and partnerships into one business model. Members of an LLC can be added and removed for a variety of reasons. The terms of the operating agreement dictate nearly every aspect of your business, so including clauses for how to remove a member from an LLC is vital.  Our experienced business law attorneys will provide you with all the information you need to draft an operating agreement that will keep you in business and out of the courtroom. “Since ownership in an LLC is property belonging to the member, a member cannot simply be removed unless the Operating Agreement or the applicable laws provide a basis for removal.” Business Attorney Trevor Brewer Benefits of an LLC in Florida Many business owners elect to form LLCs because they combine the most desirable features of corporations and partnerships into one business entity. Easy to Form Articles of organization must be filed with the Florida Department of State to form an LLC in Florida. Additionally, you must pay a one-time filing fee of $125. LLCs must submit an annual report and pay a yearly fee to maintain good standing. Tax Benefits LLCs are “pass-through” entities, meaning that the LLC’s profits are not taxed at the LLC level. Instead, individuals who receive profits from the LLC will pay taxes through their personal income tax return. Corporations, on the other hand, are “double-taxed.” A corporation’s earnings are taxed at the corporate level, and shareholders must pay taxes again on the dividends they receive. Liability Protection Business owners seeking protection from personal liability often elect to form an LLC. The hallmark of an LLC is the limited protection for its owners from the liabilities of the LLC. An LLC is considered a separate legal entity from its owners. The owners’ personal assets cannot be accessed to pay the debts of the LLC. Only the amount of money each member invested is at risk.  Ownership and Management Florida law allows LLCs to have as many members as desired. Notwithstanding, Florida permits a single individual to form an LLC. There are two basic management structures for LLCs: member-managed and manager-managed. Member-Managed A member-managed LLC is, as the name suggests, managed by its members. All members are responsible for making decisions affecting the LLC in a member-managed structure. Manager-Managed Decision making in a manager-managed LLC falls on the manager. The manager handles the business affairs of the LLC, similar to a corporate director, while the members take a passive role in management and fulfill a role more akin to a shareholder. Manager-managed LLCs are more hands-off for members of the LLC, but members are still responsible for certain decisions, like how the profits and losses will be shared. How to Add a Member to an LLC in Florida The process for adding a new member to an LLC should be addressed in the LLC’s Operating Agreement. If the Operating Agreement does not provide specific instructions, then the Florida Statutes require that a majority of the existing members of the LLC consent to add a new member. In any case, the new member should sign the Operating Agreement, or all the members should sign a new Operating Agreement that includes the new member. When a new member is added to a member-managed LLC, it is also necessary to file articles of amendment or submit an amended annual report with the Florida Secretary of State to add the new member. The fee to file an amended annual report is $50. How to Remove a Member of an LLC in Florida Removing members from an LLC is usually more complicated than adding them. There are multiple options for removing LLC members depending on the circumstances. As always, the terms of the Operating Agreement are primarily controlling. The Florida Revised Limited Liability Company Act (the Revised Act) applies to the LLC if an operating agreement does not exist or does not address how to remove a member. Our team at BrewerLong possesses intricate knowledge of Florida LLCs and can tell you how to remove a partner from an LLC as smoothly as possible.  Voluntary Most operating agreements provide a process for ending membership in an LLC. An LLC buyout agreement can provide direction when a member decides to leave an LLC. The buyout agreement can allow remaining members of the LLC to buy out the departing member’s interest rather than allowing the interest to pass to an unknown party. Expulsion Based on Operating Agreement Most LLC operating agreements contain provisions that allow for the expulsion of LLC members as a remedy for the member’s misconduct. The operating agreement dictates the forms of misconduct that warrant expulsion. Expulsion Based on Unanimous Consent of LLC Members Under the Revised Act, a unanimous vote of the LLC members may be sufficient to remove a member in limited circumstances. These circumstances include: When it would be illegal to carry on the LLC’s activities and affairs with that person as a member; When that person’s entire transferable interest in the LLC has been transferred, unless the transfer was pursuant to a charging order or for security purposes; and When that member was an entity and the entity has since been dissolved. Even in the presence of one of these circumstances, obtaining unanimous consent can be tricky. Contact an experienced business law attorney for additional information. Expulsion by Court Order LLC members can request that a court expel an LLC member in limited situations. Florida law gives a court authority to expel an LLC member who: Has engaged or is engaging in wrongful conduct that has adversely and materially affected the LLC’s activities and affairs or is expected to do so; Has committed willfully or persistently, or is committing willfully and persistently, a material breach of the operating agreement or a fiduciary duty; or Has engaged or is engaging in conduct relating to the LLC’s activities and affairs which makes it not reasonably practicable to carry on the…

A question that many people have is, can you sue an LLC member personally?  It’s true that one of the foundational characteristics of a limited liability company (LLC) is personal liability protection. However, this does not mean that LLC members can never face personal liability for actions related to their business.  “Just because you have a claim against a business that operates as an LLC does not mean that you might not also have a claim against the individual members. It’s important to consider every possible claim.” Business Dispute Attorney Michael Long If you are wondering whether you may be able to bring an LLC lawsuit against an individual owner, contact BrewerLong today. Our team of experienced Florida business law attorneys handles a wide variety of business-related legal matters. We are confident that we can help you fight to pursue and protect your rights. Florida LLCs: An Overview There are a number of reasons why many choose to form their Florida businesses as LLCs. Some of the advantages of forming as an LLC include: Simplicity of formation,  Pass-through taxation, and Flexibility in ownership and management structures.  One of the biggest advantages, however, is the personal liability protection that comes with an LLC.  This means that, generally, individual owners of the LLC are shielded from personal liability for any debts that the business entity itself incurs. Thus, the following assets of individual owners are typically separate from the LLC and are protected:  Homes,  Cars,  Personal bank accounts, and  Private investments. But of course, there are certain exceptions to be aware of.  When Suing an LLC Owner Personally May Be Appropriate While LLC owners have limited personal liability, this liability protection is not absolute by any means. In fact, there are a number of situations in which an LLC lawsuit against an individual owner or member may be appropriate. Individual Owner Guarantees Debts of the LLC In some cases, an LLC owner may guarantee debts of the business using their personal assets. Regardless of whether this is intentional or accidental, it may expose that individual owner to personal liability.  Examples where an individual owner, rather than the LLC entity, may be personally liable include situations where:  A contract was signed by an owner in their individual capacity, rather than on behalf of the LLC;  An individual owner personally guarantees a loan granted to the LLC, but the LLC fails to pay back the loan; or  You discover an LLC you have conducted business with has been using a bank account in the name of an individual owner. In any of these situations, you may be able to sue an LLC owner personally.  This can be beneficial for a number of reasons. For example, in some situations, you may find yourself suing an LLC with no assets. However, if you find that any individual owners have personally guaranteed the debts of the LLC, you may still have an avenue to recover what is owed.  Piercing the Corporate Veil Even in cases where an individual owner did not personally guarantee the debts of the LLC, you may still be able to sue an LLC owner personally. One such example is if you are able to “pierce the corporate veil.” When piercing the corporate veil, courts may ignore the limited liability status of LLC members and hold them personally liable. However, this can only be done in certain situations.  Generally, courts desire to uphold the protections provided by the LLC business structure. Thus, they will typically pierce the corporate veil and hold individual owners personally liable only where there is wrongful or fraudulent conduct or where there is no true separation between the LLC and its owners.  Factors that some courts may consider in determining whether to pierce the corporate veil include whether the LLC:  Engaged in fraudulent behavior and to what extent it did; Failed to comply with corporate formalities, such as filing requisite entity formation documents and holding annual meetings; or Commingled assets of the LLC with personal assets of individual owners. However, it is important to note that the laws in Florida regarding piercing the corporate veil are more restrictive than in other states. In fact, Florida Statutes section 605.0304(2) expressly states, “The failure of a limited liability company to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on a member or manager of the company for a debt, obligation, or other liability of the company.” Thus, before suing an LLC and attempting to pierce the corporate veil, contact an attorney to discuss the facts of your case.  Breach of Duties as an LLC Member Florida Statutes section 605.04093 provides that LLC managers or members may also be personally liable where they breach or fail to perform their duties. However, personal liability may not be imposed unless the manager’s or member’s breach of, or failure to perform, their duties constitutes one of the following:  A violation of criminal law; A transaction that conferred an improper benefit upon the manager or member; An improper distribution; Willful misconduct or conscious disregard of the best interest of the LLC; or  Recklessness, or an act or omission committed in bad faith or with malicious purpose, or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.  If you think an LLC owner may have breached their duties or failed to act, you may be able to sue them personally.  Thinking About Suing an LLC Owner Personally?  The business law attorneys at BrewerLong are standing by and ready to help.  Due to the limited liability protection afforded to LLC owners, determining whether you may be able to sue them personally can be difficult. Fortunately, our team has years of experience handling just these types of claims.  For more information on whether you have a potential claim, contact BrewerLong today for a consultation. Let’s discuss your case and see what we can do for you.

change-llc-name-florida

One of the first things many business owners decide when creating their business is the name. In certain scenarios, however, a business may need to change its name. In fact, this happens more often than you might think.  Sometimes, you might discover another business with a confusingly similar name and decide to change your business’s name to better set yourself apart. In other situations, you may simply decide that your current name no longer reflects your business’s brand.   “Getting the name of your company right is important for your business. The good news is that you can change it at any time.” Business & Branding Attorney Ashley Brewer BrewerLong is standing by and ready to help. If you have questions about changing an LLC name in Florida, give our business law attorneys a call today.  Before Changing the Name, Consider Registering a New DBA Instead of changing the official name of the LLC, it might be better to register a new “doing business as” (DBA) or fictitious name. This would especially be the case if your main concern is getting the name right for advertising purposes, since most customers will only know you by your DBA. The best part is that an LLC can have multiple DBAs.  How Can You Change the Name of an LLC in Florida? If you have never had to change an LLC name in Florida before, you may be wondering where to start. Fortunately, we’ve got you covered. Below are the main steps you need to take to change an LLC name in Florida.  1. Check Your Potential New LLC Name for Availability There’s nothing worse than putting in the time and effort of changing your LLC name only to discover that the same name has already been taken. Thus, before getting too far down the road, it is important to check your proposed new LLC name for availability.  The Florida Department of State Division of Corporations provides an easy way to do just that.  At Sunbiz.org, an official State of Florida website, you can quickly search for your potential new LLC name in an online records database. If another active LLC with the same or similar name comes up, it might be time to consider another alternative name instead.  2. Obtain and Complete the Requisite Form to Change an LLC Name in Florida Once you have made a decision on your new LLC name, you are ready to move forward with next steps. The State of Florida uses a particular form for LLC name changes. Thus, you must use this form to change the name of your Florida LLC.  The form is called the Articles of Amendment to the Articles of Organization and can be found on the Florida Department of State Division of Corporations website.  In the Articles of Amendment, you will have the opportunity to amend a number of items. Examples of things you can change include:  LLC name,  Principal office street and mailing address,  Registered agent information, and  Member/manager information.  If you only have plans to change the LLC name, you only need to fill out that section. You may leave the rest blank.  And don’t forget—your new LLC name must end with the words “Limited Liability Company,” the abbreviation “L.L.C.,” or the designation “LLC.” All LLCs in the State of Florida must meet this naming requirement. Thus, make sure to include one of these in the name on the Articles of Amendment form.  3. File the Articles of Amendment After you fill out all the information requested in the form, it is time to file your Articles of Amendment. The filing fee is $25, which can be made payable by check to the Florida Department of State. You may also request optional certified copies and/or certificates of status for additional fees.  Along with the Articles of Amendment, you must include a cover letter containing your daytime phone number and return address.  Once you’ve filed the amendment, the Florida Department of State will issue a formal letter of acknowledgment. This will serve as proof of your Florida LLC name change, so make sure to keep it for your records. Questions About How to Change an LLC Name in Florida? Contact BrewerLong Today Running a business is often tiresome and time-consuming. With so many moving pieces and tasks to address, finding the time to handle your business’s legal needs can seem impossible.  That’s where BrewerLong can be a great asset. For over a decade, we have assisted Florida businesses with all their legal needs. If you need help navigating the process to change your LLC name in Florida or want assistance with any other business-related legal needs, our experienced business law attorneys are here to help.  From business entity formation to contract review and negotiation and everything in between, the business law attorneys at BrewerLong have the knowledge and experience necessary to help you take on your business’s legal needs.   So don’t stress out over how to change an LLC name in Florida. Let our team take that off your plate. Contact BrewerLong today for a consultation, and see what we can do for you. 

hr-attorney

Employment matters can be tricky. From hiring and termination decisions to employee disputes and everything in between, there’s no question that human resources departments juggle a variety of complicated issues. In some cases, however, HR may not have all the answers. And that’s okay! But it’s important to know where to turn when these situations do arise. “Company HR managers do an amazing job of keeping up with all the details of taking care of the company’s employees. Sometimes they need help understanding how federal and state laws and regulations apply, particularly in unique situations.” HR Attorney Kristi Benson If you have questions about a particularly complicated employment matter, it might be time to consult with an HR attorney.  BrewerLong is an experienced employment and human resources law firm located in Florida that has the answers you need. Give us a call today to see how we can help you.  If you’re not quite ready to speak with an HR attorney, that’s okay too. In the meantime, here are 6 times when you should consider contacting a human resource attorney for your employment-related legal needs. 1. Hiring Decisions Before you hire an employee, there are some things you should know.  Many employers don’t realize that legal issues can arise before you even hire an employee. Thus, consulting with a human resource attorney before you begin the hiring process is a great idea. In fact, doing so just might keep you out of hot water in the future.   For example, while asking about an applicant’s age during the interview process might seem harmless, doing so could result in a potential age discrimination claim later on.   Other examples of things you shouldn’t ask a potential job candidate in the hiring process include questions about the applicant’s: Race,  Nationality,  Sexual orientation,  Marital status, or Disability.  An HR attorney can help you determine what questions are appropriate and which ones are better left unasked. Another hiring decision that may arise is how to classify a potential worker. For example, the decision of whether to classify a worker as an independent contractor vs. an employee will impact both the worker’s rights and the employer’s liabilities and expenses. Thus, it is important to know the potential implications before making a decision.  Looking to hire new workers to add to your team can be an exciting process. Nevertheless, you should always make sure you do so in an appropriate, legal, and ethical manner.  If you have questions about how to go about the hiring process in a manner that best protects you from potential legal liability, contact an HR attorney today.  2. Firing Decisions Just as important as hiring decisions are firing decisions.  The decision to terminate an employee can be difficult. Sometimes, however, it is necessary.  Examples of reasons you may need to fire an employee include:  Unethical behavior,  Theft or misuse of company property,  Poor work performance,  Poor fit within the company culture, and  Violation of company policy.  In some cases, you may need to terminate someone’s employment for reasons outside the employee’s control. For example, termination due to company-wide budget cuts may arise that render downsizing inevitable.  Whatever the case may be, the fact remains that firing an employee is a complex task. And depending on the reason for terminating the employee, you may be worried about a potential lawsuit.  Florida is an at-will employment state. This means that an employee can be fired at any time, as long as it is not for an illegal reason. Despite this fact, firing an employee still presents issues in many cases.  Even if you did not intend to fire an employee for an illegal reason, sometimes it may seem that way from an outside perspective. Thus, it is imperative that you take extra caution when firing an employee. By consulting with a human resources law firm prior to making any employment termination decisions, you can better protect yourself from exposure to legal ramifications. 3. Employment Contract Drafting and Review As is the case with all types of contracts, an employment contract is a legal document that details important rights and obligations.  While you may not need to have workers sign an employment contract, it is common practice to do so. Because employment contracts are legal documents, it is important to have them drafted and/or reviewed by an experienced legal professional. This way, you can better verify the validity of the contract and ensure that it is a fully enforceable legal document that will stand up in court if a dispute ever arises.  4. Drafting Company Policies Keeping company policies transparent and up to date is a vital part of running a company. Most importantly, it is crucial that new policies do not violate any laws.  When adopting a new policy, it’s always a great idea to contact an HR attorney to review the policy for potential legal issues. This may help you reduce the likelihood of legal challenges in the future. Additionally, it is a well-known fact that the law is ever-changing. Thus, even for your company’s more established policies, periodic review is imperative. A human resources law firm can help you review old policies in view of new laws and make revisions where necessary and appropriate. 5. Representation in Administrative Proceedings Brought By an Employee Employment law is regulated by multiple administrative agencies, including the U.S. Equal Employment Opportunity Commission (EEOC) and the Department of Labor.  Sometimes, a current or former employee may file an administrative claim against their employer with such a governmental agency.  When a government agency requests your cooperation in an investigation or administrative proceeding, contact an HR attorney as soon as practicable. While some employers try to handle administrative matters internally, a human resources attorney with experience in employment law issues can be an invaluable resource. An attorney can help you evaluate the strength of an employee’s claim against you and determine how best to respond.  6. Deciding Whether and How to Sue an Employee We all hear stories about employees…

s corp vs llc florida

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…

how to start a 501c3 in florida

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…

florida promissory note

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…

Sole-Proprietorship-in-Florida-Pros-and-Cons

If you’re looking to start a business but looking to avoid the hassle and cost of forming a company then operating as a sole proprietorship may be in your best interest. A business lawyer at BrewerLong can help answer any questions. Call today: 407-550-5604 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. In 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. 5 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. 1. 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. 2. 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. 3. 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. 4. 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. 5. 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. 5 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. 1. 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. 2. 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. 3. 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. 4. Other Businesses May Be Hesitant to Work With You Whether it is true or not, many businesses are under…