Starting your own business is an exciting venture. However, before you really dive in, one of the first things you need to do is decide on what type of business entity you want to form.
“Choosing the right form of business entity is one of the first important decisions business owners must make.”
Business Attorney Kristi Benson
Common entity types that Florida businesses often elect to form include:
- Sole proprietorships,
- Corporations, and
- Limited liability companies (LLCs).
Additionally, many new business owners choose to form a partnership. In fact, according to the U.S. Small Business Administration (SBA), partnerships are the simplest structures to form for two or more people who desire to own a business together.
Importantly, however, there are various types of partnerships to choose from in Florida. So what sets these types of partnerships apart from the others? And how do you know which one is the best fit for your future business?
Use our guide below to learn more about the various Florida limited partnership options and how to select the best one for you. If you have questions or are ready to move forward with forming your Florida business, contact the small business lawyers at BrewerLong today.
Limited Partnership in Florida: An Overview
As a general matter, a general partnership is formed when two or more people agree to go into business together. However, general partnerships have two major problems: (1) any partner can create liability for the partnership, and (2) each partner is separately liable for all of the partnership’s liabilities. A better alternative to the general partnership is a limited partnership.
Under the Florida Revised Uniform Limited Partnership Act of 2005, there are three common types of limited partnerships:
- Limited Partnership (LP),
- Limited Liability Partnership (LLP), and
- Limited Liability Limited Partnership (LLLP).
A distinguishing feature of the Florida limited partnership entity is the concept of limited liability for individual members of the business.
The concept of limited liability in the context of business law means that you are not personally responsible for the debts and liabilities of the partnership or your other business partners. However, whether you benefit from this limited liability will depend on the type of Florida limited partnership you form.
Florida Limited Partnership (Florida LP)
In a Florida LP, there must be at least one “limited partner” and at least one “general partner.” A limited partner is one who has limited personal liability for the debts and actions of the business and its other partners beyond their own personal investment in the LP.
A general partner, on the other hand, will have unlimited personal liability and may be pursued directly. However, the benefit of being a general partner is that general partners typically control the management and decisions of the partnership, whereas limited partners do not.
Florida Limited Liability Partnership (Florida LLP)
In a limited liability partnership in Florida, there are no general partners. Rather, all members of the business will be limited partners and will benefit from limited personal liability.
Additionally, all members are able to share generally in the control over and decisions for the business entity.
Florida Limited Liability Limited Partnership (Florida LLLP)
The third type of Florida limited partnership is the LLLP. LLLPs are a relatively new entity type. As such, not all states authorize the existence of LLLPs. However, Florida law does.
As with an LP, an LLLP in Florida will have at least one general partner and at least one limited partner. Further, a Florida LLLP will function very similarly to an LP.
The primary difference between the two entity types, however, is that general partners in a Florida LLLP will also benefit from limited liability. Thus, not only are they able to participate in the management of the business, but they also will be protected from liabilities and debts of the partnership.
Which Type of Florida Limited Partnership Is Right for My Business?
So, now that you have a better understanding of the types of Florida limited partnership entities, you may be asking, How do I know which type will best suit my business?
Unfortunately, there is no easy answer to this question. Each business is different and will have varying needs and goals. Thus, the best thing you can do is consult with an experienced business law attorney who can work with you to discuss your business goals and determine what entity type might be a good fit.
Do I Need to Hire a Florida Business Lawyer?
Of course, there is no legal requirement stating that you must hire a lawyer to help you start your Florida entity. Nevertheless, having one in your corner can be a great benefit to your new or growing business.
A qualified Florida business lawyer can help you with:
- Selecting an appropriate entity type for your business;
- The business formation process, generally;
- Tax planning;
- Contract drafting, review, and negotiations;
- Acquiring intellectual property rights;
- Registration and licensing;
- Legal audits and risk assessments;
- Transactions, mergers, and acquisitions;
- Business disputes and litigation; and
- General business advice and counseling.
At the end of the day, starting a business in Florida is a legal process. Thus, it’s important that you do so legally and in compliance with state and federal laws. At the same time, you should also do so in a manner that is in the best interests of your business and its future.
The best way to accomplish all of these goals is to have an experienced legal professional in your corner who can advise you appropriately at every step along the way.
BrewerLong Is Ready to Assist
Looking for a qualified business law firm in Florida that can help you with all of your business’s legal needs? If so, look no further than BrewerLong.
At BrewerLong, we pride ourselves on providing the highest quality services to businesses at all stages of the business lifecycle.
Many larger firms focus solely on securing business from large and well-established companies. However, our focus is on ensuring that even small businesses and startups get the representation they need and deserve.
Since 2008, we’ve been providing zealous advocacy and legal representation to many clients. We hope we have the opportunity to help you too.
Whether you want to learn more about Florida limited partnerships or you have general questions about your Florida business, we’re standing by and ready to help. Contact our team today to speak with an experienced business law attorney and see what BrewerLong can do for you.
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