Business Law 

Planning for the operation of a business entity requires examination into a variety of factors. Among the factors are the relationship among the parties involved in the business, the equity structure, the type of business as well as tax considerations and future plans. Therefore, the choice of entity becomes a significant decision in any business enterprise. 

Sole Proprietorship 

A sole proprietorship is a business enterprise owned by one person. A sole proprietor is liable to the full extent or his or her assets for the debts of the business and therefore has unlimited liability. Any business can operate as a sole proprietorship. With the exception, perhaps, of local occupational licenses, no agreement or filing with a government authority is necessary to create or operate as a sole proprietorship. 

Partnership 

There are two basic types of partnerships - general and limited. In the general partnership, all partners are general partners and each is liable for the debts of the partnership to the full extent of his, her or its personal assets. In the limited partnership, the liability of the limited partners for the debts of the partnership is limited to the capital or services they agreed to contribute. However, each limited partnership must have at least one general partner who is liable for the debts of the partnership to the same extent as the general partner of a general partnership. 

General Partnership 

The general partnership is an association of two or more persons to carry on as co-owners of a business for profit. The partnership may be organized by an agreement that is written, oral or implied. Each general partner is liable for the debts of the partnership to the full extent of his or her personal assets. An interest of a general partner in a general partnership is considered personal property and is not freely transferable. 

Limited Partnerships 

A limited partnership is authorized by the Florida statutes and exhibits characteristics of both a corporation and a partnership. A limited partnership is formed by filing a certificate of limited partnership with the Department of State. The limited partnership centralizes management in the general partner or partners and limits the liability of the limited partners to the capital they have invested or have agreed to invest or the value of the services they have agreed to provide. Limited partnership interests are not freely assignable, unless the limited partnership agreement so provides. The Florida statutes provide certain circumstances which result in the termination of the limited partnership, however, the partners may agree in writing to alter those provisions. A limited partnership must pay an annual fee on its invested capital with each annual report. 

Corporations 

A corporation is formed by filing the articles of incorporation with the Secretary of State, paying the charter tax and filing fee, issuing stock, adopting bylaws, and electing directors and officers. The corporate name must include the term "Inc.," "Co.," "company," "incorporated," or "corporation." As is the case with limited partners, the liability of a shareholder of a corporation for the debts of the corporation is limited to the capital or services the shareholder contributed or agreed to contribute to acquire his or her stock. Management is centralized in the board of directors elected by the shareholders. Under Florida law, a corporation may be either a "for profit" or "not for profit." Additionally, Florida law recognizes a professional service corporation. The corporate name of the professional service corporation must contain the term "chartered," "professional association" or "P.A." The income taxation of the corporation is governed by federal law and has a variety of planning options that require the assistance of an attorney familiar with Florida corporate law as well as Federal income tax law. 

Limited Liability Companies 

The limited liability company has been authorized by statute since 1982, but only recently has this form of entity been seriously considered as a viable business form for a small business. One or more person executing and filing "articles of organization" with the Secretary of State accomplishes the formation of the limited liability company. The limited liability company's name must contain the term "limited company" or "limited liability company" or the abbreviation "L.C." or "L.L.C." The limited liability company must adopt an operating agreement, which has a function similar to the bylaws of a corporation. Unless the operating agreement provides otherwise, management is vested in the members of the limited liability company. The limited liability company is designed to allow the principals to enjoy the limited liability of shareholders of a corporation and the tax benefits of a partnership.