Florida Business Formation FAQ

The state filing fee for a Florida LLC is $125, paid to the Florida Division of Corporations (Sunbiz.org). You'll also need a registered agent ($0-$150/year depending on whether you serve as your own or use a service). However, the filing fee is the easy part, what actually protects you is the operating agreement, which the state doesn't require but every LLC needs. Attorney fees for a complete LLC formation package (articles of organization, operating agreement, EIN application, and initial organizational resolutions) typically range from $800 to $2,000 depending on complexity. We offer flat-fee packages so you know the total cost upfront.

An LLC is a business entity type. An S-Corp is a tax election. You can form an LLC and then elect S-Corp taxation with the IRS (Form 2553), giving you the liability protection of an LLC with the tax treatment of an S-Corp. The key difference is how you're taxed on profits: with a standard LLC, all profits are subject to self-employment tax (15.3%). With an S-Corp election, you pay yourself a "reasonable salary" (subject to payroll taxes) and take remaining profits as distributions (not subject to self-employment tax). For businesses earning over $50,000-$70,000 in annual profit, the S-Corp election can save thousands in taxes each year.

Florida law does not require an operating agreement, but operating without one is a serious mistake. Without an operating agreement: default state statutes govern your LLC (which may not match your intentions), your personal asset protection is weaker (courts look at whether the LLC was operated as a real entity), and there are no rules for what happens when a member wants out, dies, or becomes incapacitated. An operating agreement should cover: ownership percentages, capital contributions, profit and loss distribution, management authority, voting rights, transfer restrictions, buyout provisions, and dissolution procedures. For single-member LLCs, it's shorter but equally important for maintaining liability protection.

LLC with default taxation is best for: new businesses, real estate holdings, businesses with irregular income, and situations where simplicity matters. LLC with S-Corp election is best for: established businesses with consistent profits over $50K-$70K/year where you want to minimize self-employment tax. C-Corp is best for: businesses seeking venture capital or outside investment, companies planning to go public, and businesses that want to retain earnings at the lower corporate tax rate (21%). Professional services (lawyers, doctors, CPAs) in Florida must form a Professional Association (P.A.) rather than a standard LLC. The right structure depends on your specific situation, number of owners, income level, growth plans, and exit strategy.

Every Florida business entity must designate a registered agent, a person or company authorized to receive legal documents (lawsuits, government notices, compliance correspondence) on behalf of the business. The registered agent must have a physical street address in Florida (not a P.O. box) and be available during normal business hours. You can serve as your own registered agent, but this means your personal address becomes public record on Sunbiz.org and you must always be available at that address. Many business owners use a registered agent service ($100-$150/year) for privacy and convenience, or their attorney's office.

To dissolve a Florida LLC: (1) follow the dissolution procedures in your operating agreement (typically requires a vote of members), (2) wind up business affairs, pay debts, collect receivables, distribute remaining assets to members, (3) file Articles of Dissolution with the Florida Division of Corporations ($25 fee), (4) cancel your EIN with the IRS, (5) file a final tax return, and (6) cancel any business licenses and permits. If you have outstanding debts or contracts, the dissolution process is more complex and may require notice to creditors. Don't simply stop filing your annual report, this results in an "administrative dissolution" which can create personal liability issues.

Outside general counsel means having a law firm serve as your company's legal department on a part-time or as-needed basis, without the cost of hiring a full-time in-house attorney ($150K-$300K+ salary plus benefits). As outside general counsel, we handle: contract review and drafting, employment matters, vendor and customer disputes, compliance questions, corporate governance, lease negotiations, and strategic legal planning. Many of our clients retain us on a monthly basis for a set number of hours, which gives them predictable legal costs and immediate access to an attorney who already knows their business.

Every business contract should clearly address: (1) the parties and their roles, (2) the scope of work or goods being provided, (3) compensation, amount, payment schedule, and late payment consequences, (4) timeline and milestones, (5) termination provisions, how either party can end the agreement and what happens to outstanding obligations, (6) limitation of liability and indemnification, (7) dispute resolution, whether disputes go to mediation, arbitration, or litigation, and which county's courts have jurisdiction, (8) confidentiality and non-disclosure, (9) intellectual property ownership, and (10) a governing law clause specifying Florida law. Contracts drafted without legal review frequently have gaps that only become apparent when something goes wrong.

A business acquisition involves: (1) Letter of Intent (LOI) outlining the basic terms, (2) due diligence, reviewing financials, contracts, leases, employees, litigation history, tax returns, and intellectual property, (3) negotiating the purchase agreement, asset purchase vs stock purchase, representations and warranties, non-compete provisions, transition period, and escrow, (4) securing financing if needed, (5) closing, transferring assets, assigning contracts, filing UCC documents, and transferring licenses. Asset purchases are more common for small businesses because the buyer can select which assets to acquire and which liabilities to assume. The purchase agreement is the most important document, it determines your risk exposure for years after closing.

In an asset purchase, you buy specific assets of the business (equipment, inventory, customer lists, intellectual property, goodwill) and can usually leave behind unwanted liabilities. In a stock purchase, you buy the ownership interests (shares or membership interests) of the entity itself, which means you inherit all assets AND all liabilities, including unknown ones. For buyers, asset purchases are generally safer. For sellers, stock purchases are often preferred for tax reasons and simplicity. Most small business acquisitions in Florida are structured as asset purchases. The choice has significant tax implications for both sides and should be analyzed by both a lawyer and a CPA before signing.

Florida Statute §542.335 permits non-compete agreements if they are: (1) supported by a legitimate business interest (trade secrets, substantial customer relationships, specialized training), (2) reasonable in time (courts generally uphold 6 months to 2 years), (3) reasonable in geographic scope, and (4) reasonable in the scope of restricted activity. Unlike many states, Florida courts will actually enforce non-competes and can modify unreasonable terms rather than throwing out the entire agreement. If you have employees with access to confidential information, customer relationships, or specialized training, a well-drafted non-compete is an important protective measure. Poorly drafted non-competes, however, may be unenforceable.

A commercial lease is typically a 5-10 year commitment worth hundreds of thousands of dollars, yet many business owners sign without legal review. Key provisions to negotiate: personal guarantee (try to limit or eliminate it), CAM charges (get a cap on annual increases), options to renew (lock in future rates), assignment and subletting rights, exclusive use provisions (preventing the landlord from leasing to a competitor), build-out allowance and who owns improvements, default and cure provisions, and early termination rights. A one-hour attorney review can identify provisions that could cost your business tens of thousands of dollars over the lease term.

Florida offers several layers of protection: (1) form a proper entity (LLC or corporation), this creates a legal barrier between your personal assets and business debts, (2) maintain the corporate veil, keep personal and business finances separate, hold meetings, document decisions, and maintain adequate capitalization, (3) obtain appropriate insurance, general liability, professional liability, and umbrella coverage, (4) use contracts that limit your liability, (5) for real estate, hold properties in separate LLCs so a lawsuit on one property doesn't reach others. The biggest mistake we see is commingling funds, using the business account for personal expenses or vice versa. This gives creditors an argument to "pierce the corporate veil" and reach your personal assets.

A buy-sell agreement (also called a buyout agreement) is a contract between business owners that governs what happens to an owner's interest when they die, become disabled, retire, divorce, or want to leave the business. It establishes: how the interest is valued, who can buy it (remaining owners, the company, or outside parties), the funding mechanism (typically life insurance), and the payment terms. Without a buy-sell agreement, you could end up in business with your partner's ex-spouse, estate, or creditors. It's one of the most important documents for any multi-owner business and should be reviewed and updated every 2-3 years as the business grows.

Hire a business attorney before you need one in court. The most cost-effective time is at formation, getting the structure, operating agreement, and initial contracts right from the start prevents expensive problems later. Beyond formation, hire an attorney when: signing a commercial lease, bringing on a partner, buying or selling a business, drafting or reviewing a major contract, facing a dispute that could lead to litigation, hiring employees (especially with non-competes or equity), or when you're unsure about a legal obligation. A 30-minute consultation with a business attorney often costs less than one hour of cleaning up a problem that could have been prevented.

Licensed professionals in Florida (attorneys, doctors, CPAs, architects, etc.) must form a Professional Association rather than a standard LLC under Florida Statute §621. The process involves: (1) filing Articles of Incorporation with the Division of Corporations, (2) obtaining a corporate seal, (3) drafting bylaws and shareholder agreements, (4) getting your professional licensing board to approve the entity, (5) obtaining an EIN, (6) opening business accounts, and (7) maintaining required corporate formalities (annual meetings, minutes, etc.). A P.A. provides liability protection for business debts but does NOT protect against malpractice liability, each professional remains personally liable for their own professional negligence.