If you research the benefits between a limited liability company and a corporation, you'll find a multitude of blogs and websites on the topic. The answer to the question depends on the specific facts of your unique circumstances. This article is intended to encourage you to understand your options before making a final decision, which methodology is the hallmark of a sophisticated businessperson. As you read on, remember the saying, "Those who fail to plan, plan to fail."
By way of some background, prior to the existence of corporations, people entered into business transactions through partnerships. Larger ventures, such as sea voyages to the new world, required a more efficient vehicle. This led to the creation and recognition of the first corporations, like the English East India Company, in the early 1600s. In more recent times, as a result of the evolving economic and business conditions in Florida, our Legislature recognized the Limited Liability Company. The LLC can be described as a hybrid in that it is set up like a corporation, but acts similar to a partnership in most circumstances. The key components presently absent from Florida's Limited Liability Company Statutes are robust default provisions similar to those already in place in our corporate and partnership laws. These default provisions are presently under development, but will likely take several additional legislative sessions to enact. Until that occurs, the incorporators of an LLC must be mindful to include such provisions in their operating agreements. Competent legal counsel is what is ultimately required to ensure that this is properly done.
If you have been thinking about forming a business either on your own or with "partners", then one of your first steps after you define your business plan, should be to retain qualified and competent legal counsel. Omitting this important planning step just to save some money is like buying a Ferrari and using folding chairs instead of seats. You wouldn't do that with such an expensive car, so why would you consider doing it with a business that you intent to develop into a profitable venture. A corporation over an LLC, a partnership, or even a limited liability limited partnership may be the best option for your business, but only a qualified and experienced business attorney can aid you in determining which entity is best for you. Failing to plan at the outset of your business, is planning for the business to ultimately fail.
So why not download some forms from the Internet or use documents designed for other people. Your business is unique and deserves the attention and skill set of a qualified business attorney. Downloading boilerplate forms or using other people's documents can be likened to avoiding a visit to a doctor in favor of taking someone else's prescription medicine. The documents that structure your business must be tailored to your unique situation, requirements, and intentions. A one-size-fits-all document not crafted for your business situation will not accommodate your unique and specific circumstances. Trying to save some money by stretching a generic document over your unique business will likely cost you much more money in legal fees to fix a later problem that you inadvertently created.
Businesses are fluid and dynamic; they adapt to a changing business climate. Similarly, the structure of a business and the agreements that support that entity, like shareholder agreements or operating agreements, can adapt to a particular business. However, failing to properly document your business goals at the outset of its creation deprives your business of a solid foundation from which to react and change.
In the beginning stages of creating your business, perhaps even before you incorporate, you should discuss your plans and goals with a qualified business transactions or business litigation attorney. For business litigation attorneys, the Florida Bar simplifies this search for you by identifying those individuals that have proven their expertise and experience with the recognition of Board Certification. If you want the best litigation counsel for your business, seek the advice of a Florida Bar Board Certified Business Litigation attorney.
This article is not meant to provide legal advice or to form an attorney-client relationship; it is meant only to provide general information about this topic. To view videos and articles about this and other business law related topics, please visit my website at http://www.davidsteinfeld.com/
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