Starting A Business FAQ
1. How do I form a corporation?
The primary document necessary to form a corporation in Florida is called the Articles of Incorporation. This document contains information such as the corporate name, primary address, corporate purpose and registered agent. The articles are filed with the Florida secretary of state. Once the corporation is formed, it is advisable to have an initial corporate meeting, to prepare bylaws governing the operation of the company and to issue stock certificates to shareholders.
2. How do I form a limited liability company (LLC)?
The primary document necessary to form an LLC in Florida is called the Articles of Organization. This document contains information such as the company name, primary address, company purpose and registered agent. The articles are filed with the Florida secretary of state. Once the LLC is formed, it is advisable to have an initial organizational meeting, to prepare and sign an operating agreement governing the operation of the company, and to issue member certificates.
3. Why should I form a corporation an LLC?
Operating as a corporation or an LLC offers several benefits. For instance, the ownership structure of a corporation or an LLC facilitates multiple owners of the same business. It also creates an organized process for the company to operate when there are multiple owners. But by far, the biggest advantage is the protection that a corporation or an LLC provides against lawsuits. If a company is owned by an individual and the company is sued, the owner is personally liable. That means all of their personal assets could be at risk. However, if the company operates as a corporation or an LLC and someone sues, in most instances, the owner is protected. Only the company’s assets are at risk.
4. If I’m buying a business, should I buy the assets only or should I buy the entity itself?
Whether to buy the assets or the entity is often a complex question and depends on the particular circumstances. The most common reason owners opt to purchase the assets only is that it can prevent a creditor of the old business from holding the new owner liable for an old obligation or liability. In some instances, however, purchasing and owning the entity itself may have advantages that outweigh possible liability. Get sound legal advice before making the final decision.
5. Should I have written contracts and agreements prepared for use in my business?
One of the most common mistakes companies can make is doing business on a handshake. Agreements should be documented accurately to protect everyone involved. Our lawyers are skilled at advising on the types of contracts companies need and we prepare them to fit your needs.
6. What is a buy-sell agreement and why do I need one?
Regardless of whether a corporation or an LLC, when companies have more than one owner, the owners should have a buy-sell agreement to protect themselves in the event of one of the following situations:
- An owner wants out or has a prospective buyer for his or her interest.
- An owner becomes incapacitated and can no longer work in the business.
- An owner is facing a divorce and the spouse may make a claim to the business.
- An owner is being discharged from employment for cause.
- An owner dies.
Each of these scenarios poses a situation where the owners will want to make sure that the triggering event does not negatively impact the business or the other owners. Our lawyers regularly prepare buy-sell agreements that address these scenarios so that both the company and its owners are protected.
7. What is a noncompete agreement?
A noncompete agreement is a contractual obligation between a company and one of its officers or employees that prevents the officer or employee from leaving the business and then competing against the company. Florida law allows these types of provisions, but regulates them closely. Our lawyers prepare noncompete agreements so that they can be enforced when necessary.
At Lins Law Group, P.A., our business law attorneys can help you start your business out on the right foot. Call us today at 813-280-0082 or contact us online for more information and a free initial consultation. From our offices in Tampa, we help clients throughout Florida and beyond.